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The  California  Manufacturer  and 
Eastern  Competition 


""he  natural  evolution  of  the  State  from  an  agricultural  into  a  manufacturing 
:ommunity  shown  to  be  held  in  abeyance  by  artificial  wage  rates  and  conditions 
imposed  upon  employers  by  unions.   Helplessness  of  the  California  manufacturer 
in  the  field  of  competition  through  these  influences,  and  the  inevitable  passing 
of  the  important  manufacturing  industries  of  the  State  unless  the  employer 
shall  assert  control  of  his  establishment  and  place  his  labor  on  a  basis  of 
free  industry.    Artificially  high  wages  shown  to  be  of  no  benefit  to  the 
laborer  receiving  them,  while  the  consequent  narrowing  of  the  indus- 
trial field  suppresses  business  and  produces  ever  increasing  numbers 
of  idle  workmen.    The  remedy  and  proper  line  of  operation  pre- 
sented, and  the  vast  opportunity  at  the  hands  of  the  manu- 
facturer in  supplying  the  local  and  over-sea  trade,  considered. 


norance,  neglect,  or  contempt  of  human  rights,  are  the  sole  causes  of  public 
misfortunes,  and  corruptions  of  government. — First  National  Assembly  of 
France. 


BY 


JOHN  E.  BENNETT 

OF  THE 

SAN  FRANCISCO  BAR 


Issued  by 
BUSINESS  MEN'S  ECONOMIC  ASSOCIATION 


7  / 


WRITINGS  OF  JOHN  E.  BENNETT 

PAMPHLETS 

Our  National  Tendency  and  its  Goal 

Being  a  discussion  of  the  Political  and  Industrial  direction  of  the  United  States 
under  the  influence  of  prevailing  economic  forces,  and  statement  of  the  causes 
thereof,  and  the  means  to  avert  the  conclusion  to  which  those  forces  are  pro- 
ceeding. 

Together   with   an   Address   before   the   Chinese 
Students    Association    of    America    at    its    Con- 
vention held  in  San  Francisco  in  January,  1914, 
upon 

THE  STUDENT  IN  ORIENTAL  IMMIGRATION 

Considering  the  effect  upon  China  and  Japan  of  the  Policy  of  the  United  States  in 
shutting  off  migration  of  the  Orient  with  the  West,  the  real  cause  that  moves 
industrial  migration,  and  the  condition  that  confronts  Oriental  Students  seek- 
ing education  in  the  United  States,  by  reason  of  these  influences. 

32  pp. 


"JAPAN'S  MESSAGE  TO  AMERICA" 

(A  REPLY) 

Considering  the  impelling  cause  which  moves  the  Japanese  nation  to  desire  the 
good  will  of  the  American  people;  the  necessity  to  Japan  of  free  intercourse  with 
the  civilization  of  the  West,  now  shut  off  by  immigration  exclusion;  the  calam- 
ity which  inevitably  must  befall  that  nation  through  a  continuance  of  the 
isolation  thrust  upon  her  by  this  policy.    The  doctrine  of  exclusion  shown 
to  rest  upon  a  mistaken  belief  regarding  the  effect  of  labor  immigration 
upon  wages  of  intra-country  workmen;  the  popular  opinion  being  that 
such  immigration  lowers  wages,  whereas,  in  truth,  it  raises 
wages  and  increases  general  prosperity. 
33  pp. 


THE  INDUSTRIAL  UNREST 

Noting  the  rise  and  forms  of  human  government    The  movement  for  expimging 
the  Constitution  of  the  United  States,  with  the  cause  and  processes  of  that 
movement.     The  passing  of  the  American  Commonwealth  and  the  evolution 
of  the  centralized  State  in  its  stead;  vnth  observation  of  the  several  forces 
responsible  therefor.    Remarking  the  various  expedients  for  relief  of  the 
working  classes,  among  which,  the  California  eight-hour  labor  initiatives, 
and  sundry  others.    The  basic  errors  of  such  proposals,  and  the  hope- 
lessness of  benefit  to  the  working  people  through  pursuit  of  their 
direction.    Together  with  consideration  of  the  true  cause  of  pre- 
vailing wrong  conditions  within  the  nation,  and  the  disaster  in 
which  these  must  culminate  unless  they  be  intelligently 
and  courageously  corrected. 
70  pp. 


The  California  Manufacturer  and 
Eastern  Competition 


The   natural   evolution    of   the    State   from   an    agricultural   into    a   manufacturing 
community  shown  to  be  held  in  abeyance  by  artificial  wage  rates  and  conditions 
imposed  upon  employers  by  unions.    Helplessness  of  the  California  manufacturer 
in  the  field  of  competition  through  these  influences,  and  the  inevitable  passing 
of  the  important  manufacturing  industries  of  the  State  unless  the  employer 
shall  assert  control  of  his  establishment  and  place  his  labor  on  a  basis  of 
free  industry.    Artificially  high  wages  shown  to  be  of  no  benefit  to  the 
laborer  receiving  them,  while  the  consequent  narrowing  of  the  indus- 
trial field  suppresses  business  and  produces  ever  increasing  numbers 
of  idle  workmen.    The  remedy  and  proper  line  of  operation  pre- 
sented, and  the  vast  opportunity  at  the  hands  of  the  manu- 
facturer in  supplying  the  local  and  over-sea  trade,  considered. 


Ignorance,  neglect,  or  contempt  of  human  rights,  are  the  sole  causes  of  public 
misfortunes,  and  corruptions  of  government. — First  National  Assembly  of 
France. 


BY 

JOHN  E.   BENNETT 

OF  THE 

SAN  FRANCISCO  BAR 


Issued  by 
BUSINESS  MEN'S  ECONOMIC  ASSOCIATION 


Copies  of  the  within  pamphlets  or  booklets  may  be  had 
by  addressing 

BTTSIXESS   MEN'S   ECONOMIC   ASSOCIATION, 

1310   Humboldt   Bank  Building, 

San  Francisco,  Cal. 


THE  CALIFORNIA  MANUFACTURER 
AND  EASTERN  COMPETITION 

By  JOHN  E.  BENNETT 

The  A  company  of  Los  Angeles  was  in  the  market  for  the  purchase 
of  a  quantity  of  machinery  and  received  from  the  X  company  of  San 
Francisco  ofTers  to  furnish  the  same.  The  price  proposed  was  $8,450. 
While  the  matter  was  pending,  and  before  final  arrangements,  the  Y 
company  of  Chicago  made  an  offer  to  furnish  the  same  apparatus  for 
$200  less  than  the  San  Francisco  house.  Although  the  latter  company 
had  figured  exceedingly  low,  yet  it  fell  in  price  to  meet  the  ofifer  of 
its  competitor.  Whereupon  the  Eastern  agent  wired  his  house  and 
received  the  authorization  to  cut  the  price  to  the  extent  of  $800.  As 
this  sum  would  have  been  $500  less  than  the  San  Francisco  company 
could  have  put  the  goods  on  the  car  for,  it  was  compelled  to  withdraw 
and  its  Eastern  competitor  got  the  business. 

Shortly  following  this   incident  the   Z   mining  company,   operating 

in  IMexico  but  having  its  offices  in  San  Francisco,  an  enterprise  moved 

through  California  capital,  was  in  need  of  machinery  upon  which  the  X 

company  made  an  ofifer.    The  price  made  was  $4,150.    The  proposal  seemed 

satisfactory    and    was    about    to    be    accepted    when    the    H    company    of 

Wisconsin,  hearing  of  the  matter,  made  an  ofifer  to  furnish  the  equip- 

J  ment  for  $1,000  less  than  the  California  concern,  and  give  $1,000  worth 

^  of  extras  on  one  year  dating,  and  got  the  order.    This  occurred  notwith- 

^  standing  the  X  company  had  previously  furnished  to  the  mining  company 

S  three  mills,  of  which  the  new  purchases  were  counterparts,  and  which 

^  prior  mills  had  given  entire  satisfaction. 

The  X  company,  finding  their  concern  bested  in  their  own  field  by 

v^  two  competitors  with  works  located  many  miles  from  California,  began 

^^    to   investigate   the  condition   of   manufacturing   in   the   State   to   ascertain, 

i    if  possible,  how  far  other  businesses  than  theirs  were  afifected  in  supply- 

■^  ing  the  trade  of  this  locality  by   Eastern   competition.     It  was  found 

V  that  many  lines  were  complaining  of  similar  experiences.     These  em- 

.  j  braced  the  entire  iron  maimfacturing  industry,  the  lines  of  many  fabrics, 

N^  and  numerous  articles  and  substances  of  building  material.     In   short. 

,s2_there    was    scarcely    a    field    of    manufacturing    which    Californians    had 

^"entered  that  had  not  either  l)een   sup])lante(l  and  extinguished,  or  was 

menaced  by  the  manufacturer's  agent. 

In   conference    with   the   re])resentatives   of   various   establishments 
the   narrative  of  the  X  ci>m])any's  experiences   was  paralleled  and  dis- 

|3 


401495 


coiintoil  by  stories  of  eitisodes  of  the  most  tlas^rant  cliaraotcr.  It  was 
the  concurrent  opinion  of  this  conference  that  unless  the  manufacturer 
of  Cahfornia  could  stand  at  the  door  of  the  purchaser  on  an  ecjual 
footing",  as  regards  cost  of  product  with  his  I^astern  competit(»r,  the 
day  of  fabricating"  in  this  State  of  any  kind  of  output  that  it  would  be 
worth  the  while  of  an  Eastern  concern  in  a  similar  line  to  put  a  bid 
upon,   was   at   an   end. 

That  there  were  differences  between  the  bidders  in  their  respective 
costs  of  production  w'as  manifest ;  and  the  question  arose  how  to  equal 
these.  It  was  conceived  that  the  California  factory  w'as  subject  to  the 
payment  of  various  State  taxes  and  other  charges  from  which  the 
Eastern  concern,  not  producing  here,  w"as  free.  Such  taxation  was  an 
overhead  increasing  cost  of  the  product.  Accordingly  it  was  proposed 
to  see  if  there  could  not  be  devised  a  protective  tariff  in  favor  of  the 
local  manufacturer  and  against  the  Easterner  in  the  form  of  a  license 
tax  upon  the  foreign  agent,  or  that  the  product  wdiich  he  shipped  into 
the  State  might  be  in  some  way  subjected  to  a  tax  equal  at  least  :n 
amount  to  the  differential  in  cost  of  producing  such  product. 

The  Business  ]\Ien's  Economic  Association  was  appealed  to  by  the 
manufacturers  to  give  an  opinion  upon  this  matter  and  show  what  was 
possible  of  being  done  in  the  premises  for  the  saving  of  their  enter- 
prises and  others  of  the  State  similarly  situated. 

The  inquiry  is  an  exceedingly  important  one.  The  pressure  of 
interstate  competition  has  long  been  felt  in  California,  at  no  place  quite 
so  great  as  in  San  Francisco  and  by  those  factories  about  the  bay. 
Many  factories  heretofore  in  existence  amongst  us  have  succumbed  to 
this  antagonism.  The  condition  is  not  favorable  to  the  starting  of  new- 
factories  in  this  State.  Some  of  those  now  existing  have  formed  a 
Home  Industry  League,  and  are  trying  by  working  on  public  sentiment 
to  move  purchasers  to  favor  home  production  rather  than  buy  from 
outside  concerns.*  This  influence,  however,  is  favorable  onlv  to  a 
limited  extent ;  to  what  extent  is,  indeed,  very  doubtful.  In  the  t\vo 
cases  complained  of  by  the  X  company  the  Los  Angeles  buyer  was  a 
college  friend  of  the  X  salesman  and  wanted  to  throw  him  the  business. 
but  could  not  bring  himself  to  feel  like  making  him  a  gift  of  $800  in 
order  to  favor  him  w^ith  a  transaction.  In  the  San  Francisco  case  the 
buyer  was  purchasing  for  one  of  the  most  noted  and  thorough-going 
of  Californians :  Colonel  Dan  Burns,  a  man  who  thinks  as  much  of 
California  as  anyone  in  it,  and  w^ho  would  do  as  much  for  advancing 
its  industries  as  any  of  its  public-spirited  citizens.     It  is  probable  that 

*The  Labor  Council  delegated  its  executive  officers  to  act  in  conjunction  with  the  Home  Industry 
League  and  Boilermakers'  Union  No.  25  in  urging  Mayor  Rolph  and  the  Supervisors  to  take  action  to 
compel  the  Board  of  Works  to  reconsder  its  decision  to  award  to  an  Eastern  firm  a  contract  for  boilers 
at  the  Relief  Home.  C'ommunicati'^ns  fr'^m  the  Home  Industry  League  and  the  boilermakers'  organiza- 
tion protested  against  the  policy  of  the  Works  Board  and  advocated  the  fostering  of  home  industries. 
It  was  stated  that  no  provisions  had  been  inserted  in  the  specificatons  of  the  contracts  for  an  eight- 
hour  day  for  the  employees  who  construct  the  boilers  and  that  this  is  a  violation  of  the  charter.  The 
local  firm  bidding  on  the  'nh  w^s  ?1  000  higher  than  the  Eastern  concern,  but  in  view  of  the  fact 
that  the  job  is  to  cost  $12,000,  this  difference  is  not  considered  serious  enough  to  discriminate  against 
home  industry. — San  Francisco  Examiner,  April   13,   1913. 


l)oth  he  and  liis  Los  Ang-eles  compatriot  would  be  willing  to  join  the 
Home  Industry  League,  predicated  as  it  is  upon  the  principle  of  pro- 
moting the  California  manufacturer.  But  when  it  comes  to  the  concrete 
transaction  it  is  found  that  business  is  not  sentiment,  but  rests  upon 
solid  rock  bottom  of  economics.  Men  will  push  the  line  of  cheapest 
and  best  as  far  as  it  will  go,  for  to  pay  higher  for  goods  of  a  like 
quality  because  we  love  the  seller  is  love  and  not  business,  and  business 
based  on  love  soon  goes  to  pieces.  This  law  works  as  it  ought  to 
work,  for  the  welfare  of  the  entire  of  society.  The  fault  is  not  with 
the  law.  We  must  bring  our  business  into  a  condition  that  we  can 
conform  to  it. 

There  is  no  way  under  the  laws  of  the  United  States  by  which 
any  impost  can  be  laid  by  the  State  or  any  of  its  subordinate  bodies 
upon  anything  shipped  from  any  State  or  territory  of  the  United  States 
into  California.  This  could  not  be  done  either  by  a  direct  tariff  upon 
the  goods,  or  indirectly  through  licensing  an  agent  or  his  business.  It 
is  useless  to  cite  authorities  upon  these  propositions  in  this  thes'S. 
The  cases  can  be  found  collated  by  those  who  wish  to  pursue  this 
branch  of  the  inquiry  in  2  Digest  U.  S.  Supreme  Court  Reports,  title 
Commerce,  page  1417.  Such  expedients  have,  by  various  statutory 
contrivances  as  the  ingenuity  of  legislators  have  devised,  been  many 
times  attempted,  and  always  by  the  Supreme  Court  of  the  United  States 
have  been  swept  aside  as  in  contravention  of  the  constitution  of  the 
United  States  providing  free  trade  between  the  States.  This  can  never 
be  changed  as  long  as  the  constitution  exists,  for  it  is  a  basic  incident 
and  quality  of  the  very  political  theory  upon  which  the  structure  of 
that  constitution  is  built,  namely,  the  principle  of  human  liberty.  \Ye. 
now  hear  loud  calls  for  the  abolition  of  the  constitution,  and  the  asser- 
tion that  it  is  a  document  interfering  with  the  protection  by  the  State 
of  the  citizen ;  that  it  was  formulated  to  fit  conditions  in  other  times 
than  these,  and  that  its  plan  is  not  suited  to  the  order  of  things  created 
l)v  the  larger  development  of  industry  as  obtains  at  present.* 

There  is  no  incident  with  which  the  economic  history  of  the  world 
is  more  filled  than  the  great  question  of  protection  or  free  trade.  What 
is  now  demanded  in  California  against  Chicago  and  Wisconsin  was 
common  all  over  ancient  Rome,  and  is  today  existent  throughout  most 
of  Europe.  There  are  countries  in  which  one  may  not  carry  eggs  or 
cabbages  from  the  truck  farms  without  the  walls  through  the  gates  of 
the  city  without  paying  tariff  thereon;  where  almost  every  hilltop  as 
y(ni  pass  through  the  country  is  surmounted  with  the  kiosk  of  the  toll 
taker.  During  the  middle  ages  of  Europe  it  was  the  province  of  owners 
of  estates,  or  signiors,  to  exact  "octroi"  upon  all  goods  passing 
tlieir  domains.  l"he  clog  that  these  impedimentia  have  administered 
to  business,  to  the   industrial   rise  of  the  people,   has  been   one  of  the 

*See  my  pamphlet,  "The  Iiulustiial   Unrest." 


larj^e  rease^ns  t\^r  the  l)cnii;litccl  coiulilion  of  the  lower  chisses  of  such 
countries  as  IVance.  Italy,  Spain,  Portugal  and  some  parts  of  Austria, 
while  the  countries  pervaded  by  even  a  semblance  of  English  enlighten- 
ment and  liberty  have  abolished  it.  The  remedy  for  our  troubles  is 
not  to  be  found  in  proposals  for  law^s  that  make  it  a  crime  for  men 
living  on  opposite  sides  of  a  political  boundary  line  to  exchange  the 
products  of  their  labors.  For  the  admitted  evils  that  attend  us  we 
must  look  in  other  directions  than  this  for  remedy. 

It  would  be  proper  that  the  out-of-state  concern  be  placed  upon 
an  equal  footing  as  regards  taxes  and  assessments  with  the  factory 
doing  business  w-ithin  the  State.  For  a  while  there  was  a  variance 
between  the  two  producing  corporations  in  respect  to  the  corporation 
license  tax;  but  the  legislature  has  now  wisely  repealed  this  pin-prick 
to  business  and  that  question  is  out  of  the  way.  For  the  rest,  while 
the  State  may  not  charge  a  tariff  upon  commerce  entering  the  State, 
it  could  lawfully  relieve  all  factories  within  the  State  from  taxation  of 
all  kinds,  and  instead  levy  a  tax  upon  new  material  after  it  had  been 
delivered  to  and  become  the  property  of  the  purchaser.  This  would 
be  a  tax  upon  the  output  of  the  factory  sold  within  the  State,  and  it 
would  in  like  manner  bear  upon  products  of  the  foreign  manufacturer 
placed  within  the  State.  It  would  not  be  a  tax  upon  commerce,  for 
the  goods  would  be  no  longer  in  transit,  but  would  have  become  a 
part  of  the  common  bulk  of  the  property  of  the  State,  hence  subject  to 
State  taxation,  and  the  State  has  the  power  to  say  from  what  kind  of 
property  and  in  what  way  it  will  draw  its  taxation.  If,  under  these 
circumstances  the  California  manufacturer  did  not  make  the  sale,  he 
at  least  w^ould  not  have  to  pay  taxes  in  so  far  as  that  particular  con- 
signment of  goods  was  concerned.  If  taxes  were  great  enough  to 
exercise  a  controlling  influence  in  the  situation,  this  suggestion  might 
be  effective ;  but  they  are  not.  All  the  California  manufacturer  could 
possibly  benefit  by  the  arrangement  would  be  to  the  extent  of  remission 
of  his  taxes.  If  he  sold  no  goods  in  California  he  would  pay  no  taxes ; 
the  foreigner  selling  all  the  goods  of  the  local  man's  kind  in  the  State, 
would  pay  all  the  taxes  which  otherwise  would  be  paid  by  the  local 
man ;  but  where  the  foreigner  can  pay  the  amount  of  the  State  ad 
valorem  upon  the  goods  and  then  undersell  the  local  manufacturer,  the 
shifting  of  the  tax  scheme  w^ould  not  avail  to  protect  him  from  his 
out-of-state  competitor,  and  this  would  be  precisely  the  case.  Still 
following  the  X  company  as  an  illustration,  this  concern  sells  in  Cali- 
fornia $150,000  of  manufactured  articles  annually.  It  pays  in  taxes 
of  all  kinds  to  State  and  county  governments  $.5,000  per  year,  or  3>4 
per  cent  upon  its  California  output.  We  have  seen  that  the  Eastern 
concerns  paid  the  freight  on  the  goods  to  this  State  and  sold  them  at 
16  per  cent  cheaper  than  the  X  company  was  able  to  sell  like  goods. 
They  could  pay  the  tax  and  still  beat  the  California  concern  by  12 
per  cent. 

6 


Afanifcstl}'  we  can  get  iki  relief  in  the  sitnation  by  nieditatino; 
schemes  of  taxation  either  to  advantage  the  home  man  or  to  repress 
the  foreig'ncr.  We  mnst  tnrn  our  thought  to  our  own  coiuHtion  and 
consider  why  il  is  that  he  can  sell  cheaper  than  we  can  make.  There 
are  three  elements  which  enter  into  production,  viz:  land,  capital  and 
labor.  Land  comprises  the  site  of  factory  and  ofifices  and  its  charge 
is  represented  by  rent ;  capital  covers  all  other  elements  except  labor 
and  is  represented  by  interest,  and  labor  is  paid  for  in  wages.  The 
rent  of  the  factory  site  can  be  g"otten  as  cheaply  in  California  as  in  the 
East ;  interest  is  no  higher  here  than  there,  and  the  capital  account 
required  to  conduct  business  is  smaller ;  buildings  do  not  have  to  be 
as  substantially  constructed  here  as  there  by  reason  of  more  favorable 
climate,  and  fuel  oil  and  hydro-electricity  is  a  cheaper  fuel,  light  and 
power  than  most  factories  possess.  The  freight  on  raw  material  shipped 
into  the  State  is  not  as  great  as  the  freight  on  the  finished  product  so 
shipped  in,  and  when  the  matter  is  examined  it  is  found  that  the  real 
trouble  with  the  California  manufacturer  arises  out  of  his  third  element, 
his  labor.  Wages  are  from  15  to  35  per  cent  higher  in  the  California 
factories  than  is  the  case  in  Eastern  States.  This  is  expressed  in  not 
only  actual  coin  paid,  but  in  shorter  working  hours,  in  limitation  of 
output,  in  loading  industry  with  supernumerary  employees  brought  about 
by  highly  artificial  subdivisions  of  labor  on  the  job  or  in  the  shop,  and 
by^  many  regulations  imposed  by  the  employee  upon  the  employer, 
which  gives  him  very  little  to  say  about  his  labor  except  to  pay  it. 
The  force  through  which  all  this  is  effected  is  the  labor  union,  in  the 
hands  of  which  California  industry  is  tied  tighter,  it  is  believed,  than 
is  the  case  in  any  other  industrial  region  in  the  country. 

The  question  arises,  how  can  this  condition  be  changed,  and  can 
it  be  modified  without  injury  to  the  laborer?  Very  certainly  if  we  can 
bring  about  a  state  of  things  in  which  industry  is  active,  business  brisk, 
everyone  having  all  they  can  do  and  all  making  money,  in  which  there 
are  more  jobs  than  men  and  none  are  unwillingly  idle,  notwithstanding- 
new  laborers  are  constantly  arriving  in  the  State  in  large  numbers;  in 
which  the  harbor  is  full  of  ships,  the  warehouses  full  of  goods,  the 
banks  full  of  money  which  they  freely  lend,  where  every  line  of  enter- 
prise is  vital  and  bouyant,  the  development  of  the  State  going  forward 
by  leaps  and  bounds — if  there  can  be  in  the  gift  of  Heaven  such  a 
condition  as  this  possible  to  California,  then  it  would  seem  but  a  matter 
of  common  sense  to  study  and  get  familiar  with  the  ways  and  means 
of  bringing  it  about. 

My  reader,  I  assert  to  you  with  all  the  emphasis  which  my  voice 
can  bear  or  my  pen  impress,  that  this  condition  is  not  only  i)ossible, 
but  that  it  can  at  any  time  be  called  into  existence,  called  almost  at 
once ;  and  that  if  it  be  not  brought  about  through  change  of  the  direction 
in    which    the   trend    of   affairs    is   now    moving,    times    will    not    only    i^et 


harder  as  tbo  nu~tntlis  or  years  _l;"o  on.  but  lliey  will  I'liid  their  fruitiun 
in  tiiat  relief  wiiieh  Nature  always  provides  to  stop  the  eonrse  oi  the 
passing'  of  civilization  and  in  its  defense,  namely,  war.'' 

Let  us  then  explore  the  held  of  the  innuences  with  which  industry 
in  California  is  environed  and  see  if  we  can  ;ic(iuire  an  understanding' 
of  its  complexities.  And  let  it  be  remarked  that  in  considering  any 
economic  or  sociological  phenomenon  or  postulate,  such  is  never  proven 
beyond  controversy.  Ever}^  such  doctrine  or  statement  is  polemical. 
Nothing,  however  clearly  reasoned  or  abundantly  shown,  is  beyond 
denial  by  a  considerable  class  as  to  the  correctness  of  its  conclusions. 
There  are  hundreds  of  thousands  of  people  in  the  world  today,  many  of 
them  in  the  United  States,  who  will  tell  you  with  elaboration  that 
human  slavery  as  an  institution  is  proper  and  for  the  highest  benefit 
of  both  the  enslaved  and  society.  There  is  not  the  slightest  doubt  that 
did  not  the  law  forbid,  large  numbers  of  native  born  citizens  of  the 
United  States  would  gladly  sell  themselves  into  slavery  at  the  present 
time  for  the  sake  of  the  money  payment  and  of  being  relieved  of  the 
responsibility  of  caring  for  themselves.  Dueling,  though  denounced  by 
the  law%  has  thousands  of  advocates  who  stoutly  assert  that  such 
matters  of  honor  are  private  affairs  between  gentlemen,  and  society 
has  of  right  nothing  to  do  with  it,  hence  all  law^s  passed  for  its  suppres- 
sion are  wholly  vicious  and  infringements  upon  the  liberties  of  the 
citizen.  The  years  have  not  run  far  into  the  hundreds  since  the  taking 
of  interest  for  a  loan  of  money  w^as  regarded  as  most  immoral,  a  thing 
which  no  Christian  could  be  permitted  to  do,  an  abomination  tolerated 
only  in  the  Jews,  whose  characteristic  badge  of  degradation  was  that 
they  w^ere  usurers.  AVhen  through  such  practices  they  accumulated 
means  they  were  ruthlessly  robbed  by  the  petty  potentate  to  w^hom  they 
were  subject,  who  felt  no  qualms  in  stripping  his  victim  of  wealth 
acquired  in  such  a  manner.  And  today  the  great  Socialist  party  move- 
ment, rampant  the  world  over,  has  as  one  of  its  pillars  of  support  con- 
demnation of  the  principle  of  taking  interest.  "Rent,  interest  and  profit," 
the  trident  of  iniquities  -upon  which,  to  their  concept,  the  whole  of 
industrial  society  is  spitted  over  the  fire  for  the  feast  of  the  "capitalists," 
the  only  remedy  for  wdiich  is  to  supplant  liberty  with  the  State,  to 
substitute  for  individual  initiative,  initiative  moved  by  the  political  head. 
It  is  not  surprising  then  in  this  day  to  find  fevered  disputation  upon 
every  economic  proposition  which  has  not  yet  passed  into  practical 
application  through  the  medium  of  law%  and  even  as  to  many  wdiich  have 
so  passed.  I  tell  in  the  "Industrial  Unrest"  of  a  distinguished  convoca- 
tion in  San  Francisco,  presided  over  by  the  Governor  of  the  State,  which 
devoted  an  evening  to  assertion  and  approval  of  the  plerophory  that 
the  constitution  of  the  United  States  was  out  of  date  and  wholh^  uri- 
suited  to  perform   the   functions   of  such   a   document   in   the   civilized 


*See  my  "War  and  Business." 


development  of  the  last  two  decades.  What  is  there  about  economics 
that  should  make  its  decrees  subject  to  doubt?  Does  not  the  human 
mind  move  in  its  processes  upon  principles  of  law?  If  two  and  two 
make  four  tcxlay  will  they  tomorrow  make  six?  Is  it  not  true  that 
if  there  be  a  premise  and  another  premise  the  deduction  from  them, 
when  the  mind  turns  toward  them,  will  be  always  the  same,  whether 
the  time  when  it  is  applied  be  a  thousand  years  ago  or  now?  "Plants 
are  without  locomotion;  a  tree  is  a  plant;  hence,  a  tree  is  without 
locomotion."  Can  this  syllogism  ever  work  out  other  than  as  stated? 
And  yet  political  economy  is  just  that  thing.  Take  your  hand  glass  of 
logic  and  crawl  over  the  map  of  human  affairs  in  their  public  aspect, 
and  wherever  you  focus  it  you  will  get  an  answer  with  just  the  certainty 
that  you  reach  the  conclusion  from  the  major  and  minor  premise.  There 
is  no  difficulty  or  doubt  about  correct  results  in  the  politico  economic 
region  if  you  do  valid  thinking,  if  your  reasoning  be  accurate,  and  if 
your  field  of  facts  be  sufficiently  broad  to  take  in  all  the  proper  compo- 
nents of  your  problem.  Those  people  who  arrive  at  protection,  at 
progressivism,  at  socialism  and  there  stop,  have  simply  not  pushed 
the  reasoning  process  to  embrace  all  the  facts  within  the  true  scope  of 
the  field.  They  are  blind  guides,  better  indeed,  than  no  guides  at  all, 
for  the  merit  of  such  pilotage  is  at  least  MOTION,  and  we  shall  not 
stagnate  upon  a  painted  sea  and  rot  in  stillness.  Let  our  Socialists  be 
up  and  doing;  the  gauntlet  they  throw  to  the  ground  must  be  taken  up; 
for  by  clash  can  the  light  come  forth,  the  illumination  which  is  to  show 
us  clearly  and  fully  our  true  destiny.  It  is  God's  scheme  that  the 
tenets  of  political  economy  shall  always  be  opposed.  Such  enhances 
concern  and  insures  their  application,  for  it  is  the  law  that  truth  when 
seen  will  prevail.  Those  tenets  will  be  applied  when  the  leaders  of 
thought,  having  the  confidence  of  a  majority  of  the  citizens,  realize 
their  truth.  There  will  always  be  a  minority  who  deny  their  several 
asservations.  It  is  to  be  hence  expected  that  in  such  a  question  as 
protection  or  free  trade,  there  should  persistently  be  protectionists, 
notwithstanding  the  very  life  of  the  nation,  as  in  England,  depends  upon 
the  enforcement  of  free  trade,  and  this  fact  be  recognized  by  every  two 
out  of  three  of  the  people. 

When  settlement  first  enters  a  new  territory  the  earliest  industries 
are  those  which  can  be  gathered  from  the  soil  with  least  effort.  This 
embraces  wild  life,  both  vegetable  and  animal,  and  those  minerals  or 
metals  which  have  value  to  society  immediately  they  are  brought  above 
;^round.  Hence  animals  of  the  chase,  fish  from  the  streams  and  such 
p^irsuits  as  gold  mining  will  engage  the  activities  of  the  earliest  settlers. 
Almost  simultaneous  with  this  arises  agriculture.  Seed  is  sown,  trees 
are  planted  and  towns  come  into  existence  as  centers  for  exchange  of 
the  surpluses  of  such  products  for  products  not  produced  at  farms  or 
mines,  but  needed  nevertheless  bv  the  workers.     As  these  early  indus- 


tries  iiKMcaso  in  oxtont  ;iiul  variety,  an  excess  arises,  j:;reater  than  can 
be  ciMismnetl  within  the  coninuinity ;  this  seeks  a  market  in  reLii<'n> 
l>eyon(l  the  hnnndary  nl'  the  hunie  territDi-y:  lienee  shipping;  transpires. 
This  priwhtet  may  he  >«>1<1  in  the  l".>ieij;n  market  t'l  ^r  nmnex  ;  hnt  il  i- 
very  ohvions  that  what  the  enmnuinily  wants  Irmn  the  lOri-i^iu-r  i>  nul 
nu^iiey.  hnt  prothuts:  and  the  sliipper  himself  has  n«>  nse  iCr  the  nuiiu) 
except  to  cxchanjL^e  it  U>v  the  eonuno(hties  or  service  wliicii  he  hiniseU 
desires.  Consetpiently  imports  necessarily  follow  ex])orts.  and  if  ini- 
/   ports  did  not  ensue,  exports  woidd  not  exist. 

.\s  the  prodncls  from  the  soil  or  earth  increase,  shippinii^  grows  and 
l)opidatitm  accnmnlates.  the  character  of  the  industry  of  the  community 
chang^es.  l-^ictories  arise,  and  more  and  more  the  population  takes  on 
a  manufacturing  character.  As  manufactures  multiply  and  expand  in 
size,  agriculture  also  changes  its  type.  Instead  of  growing  wheat  close 
about  the  towns,  the  towns  having  become  cities,  wheat  growing  is 
pushed  to  the  back  lands,  and  gardening  occupies  the  erstwhile  sites 
of  grain;  fruits  and  viticulture  come  forth,  and  presently  there  is  no 
room  any  more  for  wheat  growing,  but  wheat  is  brought  from  the 
regions  of  the  world  where  population  is  sparse,  and  conditions  favor- 
able for  its  culture.  Thus  the  great  plains  of  South  America  and  Canada 
become  tributary  to  the  factory  towns.  The  men  in  those  towns  occupy 
^  their  labors  in  a  higher  form  of  industry  than  growing  wheat,  and  the} 
exchange  the  products  of  their  labors  for  those  of  the  farmer  in  Argen- 
tine. There  can  hence  be  no  such  thing  as  a  State  becoming  over- 
crowded, if  economic  forces  be  permitted  to  have  their  free  course ;  for 
as  population  increases  so  that  it  would  become  overcrowded  if  its 
consumption  were  limited  to  its  own  area,  the  nature  of  its  industry 
changes,  and  the  widened  domain  of  the  world  appears  ready  to  respond. 
in  return  for  the  services  of  the  multiplied  people  expressed  in  other 
forms. 

This  idea  of  goods  coming  in  being  paid  for  with  goods  going  out, 
and  if  you  stop  imports  you  have  no  exports,  and  vice  versa,  simple  as 
it  seems,  is  very  perplexing  to  many.  It  is  precisely  at  variance  with 
the  idea  of  the  protectionists,  who  think  that  foreign  trade  consists  of 
sending  out  goods  and  getting  back  gold;  and  that  just  in  degree  as 
foreign  trade  takes  on  this  character  is  it  beneficial  or  harmful  to  a 
country.  We  hear  from  them  much  talk  about  the  "balance  of  trade" 
being  against  us  or  in  our  favor;  that  is,  if  we  get  in  more  goods  than 
we  send  out  this,  singular  as  the  perversion  may  in  fact  seem,  is  bv 
them  assumed  to  be  a  harm  to  the  country ;  for  it  then  appears  to  them 
that  we  have  been  buying  goods  abroad  and  not  at  home,  and  in  so 
buying  we  have  been  guilty  of  the  vice  of  "sending  our  gold  out  of 
the  country,"  and  this,  it  is  further  assumed,  is  "the  unkindest  cut.of  all," 
for  if  we  send  all  the  gold  out  of  the  country,  then,  if  this  reasoning  be 
correct,  it  must  follow  that  business  would  cease,  all  industry  would 

10 


subside  and  no  one  could  do  any  order  of  work  that  entailed  service 
upon  his  fellow,  whereupon  society  would  at  once  disband.  A  mere 
statement  of  these  apprehended  disasters  is  sufficient  to  show  the  error 
of  their  assertion.  Work  would  not  stop  if  all  the  gold  were  sent  out 
of  the  country,  and  indeed,  little  inconvenience  would  be  felt;  the  reason 
therefor  is  that  what  things  are  bought  with  is  not  gold,  but  goods. 
The  only  use  for  gold,  aside  from  its  few  commodity  applications,  is  to 
exchange  it  for  products  or  services.  A  man  who  has  $100  of  gold  has, 
therefore,  $100  of  credit  against  society ;  society  will  balance  that  credit 
with  goods  or  services.  A  ledger,  were  it  big  enough  to  keep  the 
accounts  of  all  society,  would  do  the  same  thing,  and  money  would  not 
be  needed.  There  was  once  a  bank  in  Venice  where  the  accounts  of 
the  whole  community  were  kept.  Gold  was  used  only  in  foreign  affairs. 
Internally  checks  solely  were  used,  and  business  was  carried  on  by  the 
bank  balancing  accounts ;  goods  and  services  were  exchanging  every- 
where and  the  bank  was  the  bookkeeper  of  the  republic.  To  a  very 
considerable  extent  this  is  common  in  business  with  us.  It  is  stated 
upon  authority  that  but  3  per  cent  of  the  business  of  the  nation  moves 
with  money,  and  these  are  mainly  the  minor  matters,  the  retail  cash 
affairs ;  the  balance  proceed  through  commercial  paper  or  book  account? 
in  which  merely  the  symbol  of  money  is  used.  What  passes  in  these 
transactions  is  goods,  services  or  their  tokens  and  this  comprises  trade. 
Gold,  in  its  aspect  of  money,  is  therefore  a  portable  bookkeeper,  each 
man  carrying  his  credit  account  with  society  in  his  purse,  the  debit 
side  being  in  the  shops  and  hands  of  the  people. 

Hence,  when  California  sends  forth  goods  to  the  outer  world  she 
wants  goods  in  return.  She  does  not  want  gold.  W^e  have  had  that 
fact  sufficiently  impressed  upon  us  within  the  last  six  months.  When 
the  imports  from  Europe  were  shut  off  through  her  population  being 
turned  to  war,  there  were  those  who  were  delighted  that  we  should 
now  have  the  opportunity  of  doing  for  ourselves  what  millions  of  help- 
ful hands  in  Europe  had  theretofore  been  doing  for  us,  and  it  was 
assumed  that  a  season  of  great  prosperity  would  come  upon  us  because 
of  that  fact.  We  would  be  sending  out  g'oods  and  getting  only  gold. 
We  noticed,  however,  that  as  the  goods  went  out  and  the  gold  came 
in  the  gold  declined  in  its  purchasing  power  and  there  came  upon  us 
an  era  of  high  prices,  which  meant  simply  that  gold  was  relatively  more 
plentiful  than  goods.  Let  us  continue  to  send  out  goods  and  get  in  gold, 
and  we  shall  soon  find  that  gold  will  lose  practically  altogether  its  ability 
to  buy  through  its  mere  abundance  in  the  country,  the  commodity  cpiality 
of  the  metal  not  being  able  to  hcjld  its  value  u]);  and  yet,  strangely 
enough,  as  ])lentirul  as  it  may  be  in  the  country,  we  may  see  very  little 
of  it  around,  because  of  the  dearth  of  activities  to  bring  it  out — a  sub- 
sidence which  always  attends  high  prices.     Under  such  circumstances 

11 


this  one-sided  trade   would   soon  snufF  itself  out,  and   we  should   then 
have  a  clear  vision  oi  the  mud  bottom  of  the  protectionist  theory* 

Seeing",  then,  that  trade  issuini;  from  this  California  town,  call  it 
San  Francisco  or  San  Jose  or  what  you  will,  and  .Cooing  abroad,  whether 
it  be  across  the  ocean  or  across  the  bay,  is  sent  thither  for  the  purpose 
of  bringing  goods  into  the  town,  it  then  concerns  us  to  have  just  as 
few  clogs  to,  and  restrictions  upon,  that  transaction  as  possible;  in  other 
words,  that  exchange  should  be  made  as  free  of  costs  as  we  are  able  to 
make  it.  If  we  were  going  to  ship  to  San  Diego,  for  instance,  no  one 
would  think  of  shipping  via  Honolulu  by  water,  or  by  way  of  Reno, 
Nevada,  by  land,  for  the  purpose  of  increasing  the  cost  of  the  freight 
before  it  should  be  delivered  to  the  San  Diego  purchaser.  Nor  if  we 
were  importing  from  Hawaii  would  it  occur  to  us  that  it  were  best  that 
the  ship  should  not  come  to  the  wharf,  but  that  it  should  be  hove  to  ofT 
the  heads  and  lighter  in  its  cargo,  so  that  the  expenses  of  landing  might 
be  increased.  The  natural  course  of  business  is  to  efifect  its  ends  by  the 
most  economical  and  expeditious  means;  to  acquire  our  desires,  in  short, 
by  the  least  possible  expenditure  of  effort ;  and  if  when  some  of  us  who 
were  engaged  in  shipping  wished  to  move  the  State  to  construct  wharves 
and  dredge  the  harbor  so  ships  might  come  in  and  lay  alongside  and 
discharge  directly  into  the  warehouses,  we  fovmd  ourselves  opposed  by 
the  amalgamated  or  other  aggregate  of  lightermen  who  put  up  an  argu- 
ment that  if  wharves  were  built  and  dredging  done  their  industry  would 
be  ruined,  that  such  industry  now  employed  two  thousand  men,  all  native 
born  citizens  of  the  State,  who  had  depending  upon  them  10,000  people, 
the  same  being  all  residents,  that  the  industry  yielded  $10,000  per  day. 
in  a  year  $3,000,000,  all  of  which  money  found  its  way  into  the  tills  of 
merchants  in  this  State ;  that  there  was  invested  in  properties  of  the 
industry^  over  one  million  dollars,  practically  all  of  which  would  be  lost 
if  the  threatened  changes  were  made ;  that  the  efifect  of  such  changes 
w'ould  be  to  benefit  no  one  but  the  foreigner,  since  by  reducing  the  cost 
of  his  laying  his  goods  down  in  San  Francisco  he  would  simply  be  so 
much  more  in  pocket,  and  by  lowering  the  cost  of  his  getting  his  goods 
out  of  San  Francisco  he  would  only  be  saving  thus  much  on  his  pur- 
chases here ;  in  either  event  the  San  Franciscan  would  suffer.  It  is 
easy  to  understand  how^  these  arguments,  made  to  men  in  a  given  stage 
of  their  mental  development,  Avould  prevail,  and  we  should  be  treated  to 
the  spectacle  of  continuing  to  do  business  in  the  most  costly  way 
because  of  our  fear  of  harming  ourselves  if  w^e  should  do  it  in  a  manne; 
manifestly  better,  more  speedy  and   cheaper. 

*It  may  readily  be  seen  how  the  operation  of  this  law  may  stop  the  war  in  Europe,  if  the  process 
goes  on  long  enough.  Europe  sends  all  her  gold  to  the  United  States  and  the  West  to  buy  goods. 
Exhausting  herself  of  gold  she  employs  her  credit  and  buys  back  again  the  gold  with  bonds.  Presently 
she  exhausts  her  credit,  so  that  the  $100  bond  buys  little  gold.  This  latter  she  is  spending  in  a  con- 
stantly rising  market,  so  that  it  comes  to  pass  that  the  gold  buys  little  food  and  else.  War  in  conse- 
quence comes  to  a  standstill  through  sheer  failure  of  the  purchasing  power  of  gold.  We  suffer  in  this 
condition  also,  for  our  prices  are  raised  not  only  to  Europe  hut  to  us.  How  long  this  phenomenon 
would  require  to  work  itself  out  I  do  not  coniec*ure:  but  the  direction  is  now  on  the  hieh  road  toward 
whatever  goal  it  is  proceeding,  and  the  war  needs  only  to  keep  under  way  to  demonstrate  to  the  world 
the  foolishness  of  the  theory  that  a  country  is  well  off  when  it  is  sending  out  goods  and  getting  in  gold. 

12 


Yet  San  Francisco  has  been  consistently  advised  l:)y  its  ne\vs[)ai)er 
and  other  press  to  conduct  its  foreign  trade  in  just  that  way,  and  it  has 
most  uniformly  voted  that  political  ticket  which  stood  for  a  national 
policy  of  dredging  a  harbor  and  constructing  wharves  to  facilitate  and 
cheapen  the  delivery  of  cargoes,  then  levying  a  tariff  upon  them  for 
the  purpose  of  discouraging  their  importation  through  making  their 
landing  expensive.  And  this  tariff  has  been  levied  upon  the  assumption 
that  if  goods  were  made  costly  to  get  into  the  country,  and  their 
importation  were  hence  lessened,  thereby  we  would  benefit,  because 
then  the  opportunity  to  make  those  goods,  which  came  into  the  country 
to  supply  a  demand,  would  be  reserved  to  our  own  people ;  we  at  home 
would  have  more  work,  and  we  would  keep  our  gold  in  the  country. 
It  has  never  occurred  to  these  Socialists  that  the  coming  in  of  goods 
was  for  no  other  reason  that  that  goods  went  out,  or  were  going  out 
to  pay  for  them,  and  that  to  prevent  the  goods  from  coming  in  was  to 
prevent  the  goods  from  going  out.  That  all  that  Hawaii  had  with  which 
to  buy  the  thousand  things  which  she  needed  from  the  United  States 
was  what  her  people  in  the  existing  stage  of  their  civilized  development 
were  able  by  their  labors  to  bring  forth,  at  present  chiefly  sugar  and 
pineapples,  and  that  Japan's  situation  is  precisely  the  same,  her  genius, 
in  so  far  as  it  has  progressed,  expressing  itself  chiefly  in  tea  and  raw 
silk,  and  if  we  did  not  take  these  things,  or  some  other  country  did  not 
take  them  and.  give  her  money,  she  could  not  buy  machinery  and  else 
from  us.  That  this  state  of  things  never  changes ;  for  even  when  those 
countries  rise  to  produce  many  of  the  fabrications  which  we  ourselves 
bring  forth,  the  result  will  simply  be  that  her  demand  upon  us  will 
increase,  for  her  needs  will  have  become  greater,  and  the  light  of  knowl- 
edge will  have  enabled  her  to  send  to  us  creations  of  higher  value  than 
she  sends  now.  If  the  civilization  of  Japan  were  equal  to  or  greater  than 
our  own,  and  she  produced  all  the  things  that  we  produced,  then  there 
would  simply  be  a  larger  and  ever  vaster  trade  between  us.  Our  great- 
est trade  is  with  the  nations  who  are  highest  civilized,  who  are  developed 
like  ourselves.  In  nothing  does  England  more  excel  than  in  the  manu- 
facture of  textiles ;  of  these  she  sends  us  enormous  quantities ;  and  yet 
we  send  her  textiles  of  our  own  manufacture  in  great  quantities;  the 
reason  why  we  thus  send  her  is  due  to  variation  in  kinds  and  qualities ; 
and  it  is  upon  such  variations  that  trade  is  built.  These  considerations, 
it  seems,  do  not  occur  to  the  protectionist,  who  is  repeatedly  bringing 
forward  the  statement  that  if  we  (Id  not  keep  foreign  goods  out  of  the 
country,  such  commodities  will  enter,  and  by  conii)eting  with  our  own 
manufactures  drive  them  out  of  business  through  underselling  them 
in  this,  our  market.  The  means  l)y  which  the  foreigner  can  do  this,  it 
is  asserted,  is  through  i)aying  his  labor  less  than  we  do  ours,  whereby 
he  can  produce  at  less  cost  than  we  can. 

13 


There  is  some  tnitli  in  this,  though  not  to  tlio  extent  that  is 
ciMUinonly  supposed.  It  is  the  cpiaHty  of  civilization  that  those  possess- 
ing it  have  a  pcnvcr  o\er  nature  which  the  less  deveh^perl  do  not  have. 
Tliis  expresses  itself  in  the  ability  to  force  nature  to  till  our  desires  by 
less  expenditure  of  etTort.  Although  the  Oriental  in  his  own  country 
may  work  for  a  few  cents  a  da}',  we  here  work  chca])cr  than  docs  he. 
This  is  manilest.  for  we  can  lay  down  sawed  lumber  on  the  dock  at 
Sing^apore  at  a  less  price  than  can  the  two  coolies  ripping'  the  log  with 
a  double-end  saw  turn  out  boards  at  a  wage  of  10  cents  per  day ;  and 
yet  in  doing  this  we  can  pay  our  laborers  three  or  four  dollars  per  day, 
and  in  earning  it  they  do  not  have  to  work  half  so  hard  as  do  the 
r\lalays  in  their  occupation.  The  reason  the  ^Malays  cannot  earn  more 
wages  is  because  their  product  does  not  yield  it.  How  could  their 
employer  pay  them  three  dollars  a  day  when  in  a  whole  day  they  do 
not  turn  out  two  dollars"  worth  of  lumber?  The  Californian  or  the 
\\'ashingtonian  gets  three  dollars  because  the  power  of  his  hand  has 
been  potentialized  by  a  machine,  to  wit:  the  saw  mill  and  all  the  rotaries, 
reciprocating  and  other  engines,  systems  and  managements  that  go  with 
it,  which  produces  in  a  day  with  fifty  men  more  saw^ed  lumber  than  the 
Singapore  operatives  could  turn  out  with  a  force  two  thousand  strong. 
The  work  is  less  laborious  and  far  more  interesting  than  the  Singapore 
work,  and  if  it  were  proposed  to  a  man  on  a  saw'  in  the  mill  to  take  him 
off  that  work  and  set  him  at  the  back  and  forth  movement  Alalay  fashion 
at  the  log,  even  at  the  same  w'ages  he  is  now  getting,  he  would  feel 
outraged  and  indignant,  and  w-ell  he  might ;  and  yet  this  same  labor- 
saving  machine  w'as  fought  upon  its  coming  into  existence  by  prede- 
cessors of  these  same  laborers,  with  the  same  vigor  and  onslaught  with 
which  they  are  now  fighting  the  entire  of  industry  through  the  union.  The 
history  of  labor  w-ars,  in  its  multifarious  episodes,  contains  no  more 
bloody  page  than  that  of  the  frame-breaking  riots  of  England,  when 
the  shuttle  weaving  machine  was  put  to  use  in  the  first  of  the  modern 
textile  mills,  and  the  laborer  was  thereby  released  from  his  hand  loom 
with  his  foot  treadle  in  his  dirt  floor  and  grass-roofed  cottage,  where 
he  sat  sixteen  hours  a  day  in  the  task  of  weaving  a  coarse  fabric  which 
comprised  the  product  of  the  time,  while  he  himself  wore  wooden  shoes 
and  a  jerkin,  bifurcated  to  provide  a  breeches.  Had  the  laborers  had 
their  way  they  would  have  held  the  weaving  industry  and  all  industry 
forever  to  the  level  of  the  man  at  the  loom.  And  today,  in  all  directions 
you  find  hundreds  of  thousands  of  people,  laborers  and  so-called  non- 
laborers,  who  will  tell  you  that  the  cause  of  all  of  this  out  of  work 
condition  is  labor-saving  machinery;  that  if  such  w'ere  done  away  with 
and  the  w'ork  given  to  men  to  do  by  hand,  that  everybody- would  be 
employed,  for  the  work  could  Ijc  made  to  "go  around,"  just  as  the 
recent  eight-h(nir  proposal  was  devised  to  make  work  "go  round"  by 
increasing  the  number  of  men  necessary  to  perform  a  given  job  of  work 

14 


in  a  given  time;  that  is  to  say,  to  do  the  things  in  snch  a  way  as  would 
increase  their  cost,  to  ship  to  San  Diego  l^y  the  way  of  Honolulu,  to 
land  carg'oes  by  the  use  of  lighters. 

While  it  .can  he  seen   from   the  foregoing  that   tlicre   is  nothing  to 
fear  from  the  so-called  cheap  labor  of  the  Orient,  or  of  Em-ope,  for  the 
reason  that  their  cheap  labor  produces  little,  and  as  soon  as  it  begins  to 
increase  its  productions  either  in  quality  or  grade,  by  the  use  of  skill 
or  machines,  its  wages  rise,  as  has  been  shown  to  be  the  case  in  the 
cotton  and  other  mills  of  China  and  Japan,  the  laborers  g-etting  at  all 
times  what  the  product  can  afiford  to  pay  them,  yet  it  is  nevertheless  a 
fact  that  where  wages  are  artificially  high,  as  where  they  are  fixed  by 
unions  without  regard  to  economic  law,  goods  from  abroad,  produced 
with  wages  at  a  lower  cost,  will  undersell  the  goods  of  the  home  manu- 
facturer.   In  this  statement  the  protectionist  is  correct.    The  protection- 
ist principle,   therefore,  goes  along  with   wages   artificially  high.     The 
union  and  the  protectionist  stand  together,  while  the  individualist  and 
free  trader  are  the  same  ;  and  one  of  the  most  singular  anomalies  that 
we  find  in  the  controversial  forum  is  the  circumstance  of  the  Socialist, 
who  is  properly  a  protectionist,  being  under  his  platform  a  free  trader. 
The   phenomenon   of   artificially   high   wages   will,   if   they   be   held   to, 
wreck  the  proprietor  in  the  presence  of  competition  from  a  region  where 
wages  are   low.     We   have   observed   this   in   the   case   of   the   Eastern 
competitor    to    the    California    manufacturer.     The    latter    instinctively 
turns  against  the  man  from  Illinois  just  in  the  way  that  Congress  turns 
against  the  man  from  France,  that  is,  to  place  tariffs  at  the  border.     It 
can  be  seen,  if  prevailing  conditions  are  maintained,  how  this  influence 
must  exert  itself.     The  pressure  of  the  people  as  a  State,  as  population 
increases,  to  change  from  an  agricultural  to  a  manufacturing  State,  is  very 
great ;  and  they  cannot  do  so  in  the  presence  of  outside  competition  if  wages 
within  be  artificially  high.     Hence  they  demand  tariffs.     The  only  reliefs 
are,  first:    for  the  unions  to  place  all  industries  of  the  nation  on  exactly  the 
same  wage  paying  basis.     The  pressure  would  then  be  uniform  over  the 
nation,  operating  under  a  protective  tariff  keeping  out  the  goods  of  the 
foreigner  from^  competing.     As  the  rise  of  wages  occurred,  invariably  inci- 
dental to  wages  artificially  fixed,  the  idle  slough  of  labor  thrown  off  of 
industry  by  the  unions  would  fall  against  the  land,  where  they  might  go  to 
work,  unless  the  high  price  of  land  kept  them  off.     The  problem  would 
become  acute  as  a  land  problem.     If  the  price  of  land  were  held  down  by 
some  force  of  law,  few  ill  effects  of  the  system  would  be  felt  in  such  a 
country  as  the  United  States  for  many  years,  whereas  in  a  country  like  one 
of  the  Central  American  states,  the  condition  would  (|uickly  become  unbear- 
able.    In  the  United  States  the  phenomenon  would  express  itself  in  a  slug- 
gish but  highly  aristocratic  manufacturing  field,   and  a  huge  agricultural 
population,  a  state  of  things  somewhat  analogous  to  the  condition  of  China ; 
the  manufactures  being,  however,  much  more  highly  (levelo])ed.    Second  :  for 

15 


ihc  several  employers  to  rid  tlieiiiselves  of  the  union  as  a  \va,L;e  interference. 
and  respectively  exercise  full  control  of  their  businesses,  permitting'  natural 
law  to  take  its  course  therein  or.  third:  the  states  must  break  apart  and  the 
federal  body  be  abolished,  unless  the  constitution  can  be  changed  to  admit 
of  protective  tariffs  b\-  the  Slates,  and  when  that  is  effected  the  States  shall 
have  broken  ajiart  and  will  be  separate,  indei)entlent  sovereignties  with  their 
several  petty  kings,  whether  the  "indissoluble  union"  be  formally  dissolved 
or  not. 

The  Eastern  manufacturer  is  not  better  off  tban  the  California  factory 
except  in  the  matter  of  labor  and  those  incidents  which  a])pertain  to  labor. 
Given  equality  as  to  this  the  Californian  can  not  alone  best  his  Eastern  com- 
petitor, but  he  can  open  the  great  markets  of  the  Orient  whicli  are  now  shut 
to  him  with  a  clam-like  tightness  and  rigidity.  It  is  to  the  labor  question 
that  the  Californian  must  address  himself  if  he  wishes  to  survive,  if  he 
wishes  to  put  California  on  the  plane  of  growth,  to  permit  it  to  develop  in 
its  natural  course  toward  a  manufacturing  state  as  its  population  increases, 
instead  of  being  held  back  in  an  agricultural  condition,  and  her  thousands 
of  laborers  whose  energies  might  be  fruitful  in  the  creation  of  wealth,  held 
in  idleness  and  permitted  to  become  factors  of  public  disturbance  and  decay. 
With  this  change,  however,  effected,  California  would  rapidly  rise  to 
her  full  industrial  strength.  The  restoration  of  natural  wages  as  against 
artificial  wages  would  not  solve  all  the  economic  problems  with  which  the 
State  is  afflicted,  which  hold  down  production  and  create  gross  injustice  in 
distribution,  but  it  would  solve  the  chief  problem  without  which  solution 
there  is  little  use  to  attempt  work  on  the  others,  and  which  when  solved 
will  clarify  and  intensify  the  other  evils  so  they  may  be  turned  to  with  vigor 
snd  quickly  gotten  out  of  the  way.  For  the  present  let  us  settle  the  labor 
question;  and  in  doing  this  we  shall  do  no  harm,  but  only  benefit  to  the 
laborer,  not  alone  the  out-of-work  man,  to  whom  will  be  given  employment, 
but  to  the  highly  paid  union  laborer  who  thinks  he  is  getting  high  wages, 
but  who  in  truth  is  getting  low  wages,  when  he  is  receiving  six  or  seven 
dollars  per  day. 

There  is  no  proper  or  justifiable  reason  for  the  payment  by  the  California 
manufacturer  of  a  higher  wage  than  prevails  elsewhere,  even  in  the  lowest 
paying  wage  State  in  the  Union.  Living  in  California  ought  to  be  the  cheap- 
est and  best  that  exists  anywhere  in  the  world.  In  scarcely  any  country  will 
you  find  more  fertile  soil ;  at  no  place  is  the  climate  more  favorable  to  pro- 
duction of  crops.  Where  can  the  laborer  live  where  he  has  less  expense  for 
doctors'  bills,  or  where  less  time  is  lost  from  work  on  account  of  weather? 
He  requires  less  housing,  less  clothing  in  California  than  in  other  places  of 
vigorous  climate.  Nature  has  lavished  her  gifts  upon  California.  Why 
must  wages  be  higher  in  this  State  than  elsewhere  in  order  for  a  man  to 
live  as  well  as  men  live  elsewhere,  and  who  pretends  that  the  laborer  lives' 
better  here,  in  a  like  grade  of  employment,  than  he  lives  in  Wisconsin  or  in 
Ohio  where  a  lesser  wage  is  paid !     Let  such  be  the  case,  and  the  difference 

16 


vvoukl  be  very  sli^^lit  when  California  would  draw  the  labor  of  the  East,  and 
no  advertisement  "Keep  Away  from  California,"  or  "Don't  Come  to  San 
l^>ancisco,  Ten  Thousand  Men  out  of  Work"  which  the  labor  unions  might 
spread  throughout  the  East,  and  no  power  they  could  bring  to  bear  in  this 
State,  could  hold  back  that  migration,  moved  by  a  desire  to  reach,  with  the 
expenditure  of  their  wonted  eifort,  a  higher  plane  of  enjoyment  of  life. 

Wages  have  always  been  higher  in  California  than  in  the  East.  They  so 
started  with  the  settlement  of  the  State  and  they  have  so  continued.  During 
the  days  of  Chinese  immigration,  when  we  were  commonly  told,  and  it  was 
popularly  believed,  that  wag'es  had  been  lowered  through  rivalry  of  the 
Chinese  to  a  point  where  an  American  could  live  only  on  the  scale  of  a 
Chinaman,  wages  were  in  fact  averaging  thirty-two  per  cent  higher,  and  the 
cost  of  living  was  much  cheaper,  than  in  Eastern  cities.  Below  is  presented 
a  summary  of  statistics  appearing  in  a  bulletin  of  the  United  States  Bureau 
of  Labor,  taken  from  the  actual  pay  rolls  of  twelve  cities  of  the  United 
States,  including  San  Erancisco,  embracing  nineteen  trades  and  covering  the 
period  from  1870-1890.  It  is  excerpted  from  "Chinese  Immigration,"  by 
Mary  Roberts  Coolidge,  p.  354: 

COMPARISON    OF    MAXIMUM   AND  MINIMUM  DAILY  WAGES 

OF  19  TRADES  IN  SAN  FRANCISCO  AND  IN 

11  OTHER  CITIES,  1870-1890. 


TRADE 

SO 

C 
Pi 

to  a 

Amt.  by  which 

Mm.    of   S.    F. 

exceeds  max. 

of    11    Cities 

Blacksmiths 

2.70 
1.59 
2.69 
4.13 
2.60 
2.82 
4.02 
2.03 
2.20 
2.79 
1.63 
1.57 
2.98 
2.52 
3.15 
3.62 
3.64 
2.66 
1.95 

2.43 
1.41 
2.41 
3.00 
2.28 
2.64 
3.49 
1.75 
1.58 
2.36 
1.45 
1.40 
2.68 
2.22 
2.79 
2.81 
2.66 
2.16 
1.71 

.27 
.18 
.28 
1.13 
.32 
.18 
.53 
.28 
.62 
.43 
.18 
.17 
.30 
.30 
.36 
.81 
.98 
.50 
.24 

3.80 
2.34 
3.46 
5.00 
3,85 
3.54 
4.79 
3.06 
3.00 
3.71 
2.50 
2.00 
3.89 
3.36 
3.69 
5.00 
4.11 
3.72 
2.67 

3.33 
2.09 
3.15 
4.00 
3.09 
3.27 
4.53 
2.54 
2.35 
3.40 
2.00 
1,97 
3.15 
2.95 
3.55 
4,83 
3 ,  66 
3 ,  00 
2,62 

.47 
.25 
.31 
1,00 
.76 
.27 
,26 
.52 
.65 
.31 
.50 
.03 
.74 
.41 
.14 
.17 
.45 
.72 
.05 

63 

Blacksmiths'  Helpers.. 
Boilermakers.        .    .  . 

.50 
46 

Bricklayers                .  .  ^ 

13 

Carpenters 

49 

Compositors              .  .  . 

45 

Engineers  (R.R.) 

Firemen  (R.R.) 

Hod  Carriers. 

Iron  Moulders 

Laborers  (Street) 

Laborers  (General)  .  .  . 

Pattern  Makers 

Machinists 

Plumbers 

Masons  (Stone) 

Stone  Cutters 

Painters 

Teamsters 

.51 
.51 
.15 
.61 
.37 
.40 
.17 
.43 
.40 
.21 
.02 
.34 
.67 

Averages .                   ... 

2.69 

2.27 

.42 

3.55 

3.13 

.89 

93 

The  same  phenomena  obtained,  however,  in  manufactures.  In  the  boot 
and  shoe  industry  the  average  wage  was  22  ])er  cent  higher  in  California 
than  were  the  wages  in  the  industry  in  Maryland,  and  46  ])er  cent  higher 
than  in  Ohio,  the  State  paying  the  lowest  wages  in  that  line.     In  the  woolen 

17 


inanufacturiiii;  iiulustr\-,  waives  of  the  various  operatives  ran  from  35  cents 
per  (.lay  loss  for  the  ccnnnion  hihorer  to  $i.4()  i)er  clay  more  for  the  shearer. 
and  $2.30  more  for  the  loom  fixer  and  boss  carder  than  was  the  case  in  ei^t^ht 
northern  States.  In  many  of  these  occnpations  ihc'  (  hinese  received  hii;her 
v.'ages  than  were  paid  to  white  emplnyees  in  the  h-ast.''  C'omparinj;-  the  table 
appeariiii^'  on  previons  pai;e  with  a  similar  table  vi  wages  of  twelve  cities 
inchuling-  San  I'Vancisco.  as  shown  by  bulletins  of  the  U.  S.  Labor  Bureau 
for  the  year  1913.  we  have  the  following  (see  p.  19)  : 

It  will  be  observed  by  this  later  table  that  in  the  decades  which  have 
followed  those  of  the  first  table,  wages  have  greatly  increased.  This  phe- 
nomenon is  not  alone  in  California,  hut  it  obtains  all  over  the  United  States. t 
The  increase  will  be  fastest  where  wages  are  highest,  and  their  upward  trend 
will  accordingly  be  accelerated  here  in  this  State.  The  reason  for  this  ascend- 
ing movement  is  solely  the  fact  of  wages  being  fixed,  or  their  standard  set,  by 
labor  unions  without  any  regard  to  economic  law.  The  rational  operation 
of  wages  can  no  more  be  tampered  with  without  untoward  results  than  can 
any  other  expression  of  natural  law.  The  result  has  been  a  general  rise  in 
prices  w-hich  in  turn  has  called  for  higher  raises  of  wages,  and  so  the  process 
has  gone  on.  As  the  cost  of  living  rises,  so  must  demands  for  higher  wages 
occur;  and,  as  stated,  the  higher  wages  become,  and  correspondingly  the 
higher  the  cost  of  living,  the  shorter  become  the  intervals  when  demands 
for  higher  wages  become  necessary.  This  operation  is  greatly  accelerated 
by  the  concomitant  movement  of  the  unions  in  shortening  the  hours  of  labor, 
v.'hich  is  another  way  of  raising  wagesy — the  turning  out  of  a  less  product 
for  a  given  sum  of  wages,  while  the  low^ering  of  the  degree  of  efficiency  of 
the  laborer  through  feeling  himself  no  longer  subject  to  discipline  of  the 
employer  through  the  power  of  discharge,  but  that  he  is  held  in  place  by  the 
strength  of  the  union,  together  with  provisions  among  the  workers  for  limita- 
tion of  output,  are  all  contributing  causes  to  increase  cost  of  production  and 
amount  to  raises  of  wages,  though  not  taking  the  forms  of  money  payments. 
Add  to  this  the  attitude  of  the  unions  toward  the  labor  immigrant  in  holding 
the  latter  out  of  the  country,  whereby  the  prices  of  products  of  the  farms 
keep  rising  through  lack  of  efficient  labor  to  produce  them,  and  there  is  com- 
prised a  general  condition  of  rising  prices  of  commodities  which  ever 
presses  the  laborer  wdio  consumes  these  commodities  to  demand  continuously 
higher  and  higher  wage  in  order  to  hold  to  his  prevailing  standard  of  living. 
The  effect  of  this,  as  I  have  explained  in  my  prior  w-ritings,  is  to  contract  the 
territory  of  shipment  of  the  product,  and  where  this  arbitrary  power  of  the 
unions  is  exerted  with  various  effect  at  different  parts  of  the  country,  w^e 
have  a  condition  in  which  an  industry  cannot  hold  its  own  against  competi- 

*See  Coolidge,  "Chinese  Immigration,"  pages  361,  373. 

±See  table,  p.  28. 

tRaises  of  wages  by  shortening  of  hours  occur,  even  where  wages  are  paid  on  an  hour  basis  and 
there  is  no  increase  per  hour;  which  is  seldom  the  case,  as  where  demands  are  made  for  reduced  hours,, 
corresponding  reduction  of  the  day's  wage  is  never  conceded.  The  laborer  first  wants  the  pay;  second, 
less  working  hours  for  the  pay;  he  would  rather  work  the  full  hours  than  that  his  pay  be  reduced. 
But  even  if  there  were  an  equalized  reduction  in  pav  with  the  shorter  day,  still  the  emnloyer  would 
suffer,  because  the  product  turned  out  in  a  day  is  less  and  the  overhead  goes  on.  This,  of  course, 
would  not  occur  where  the  twenty-four  hours  are  filled  with  shifts  who  work  at  an  equal  per  hour 
wage,  if  any  such  case  can  be  found. 

18 


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19 


tors  even  within  the  hmitcd  raihus  of  its  dwn  fact(»ry  ^itt.' ;  m>  that  thruu^li 
the  pressure  of  these  several  inthieiiees  the  iii(histr\-  must  inevitahlv  sucounih. 

The  prechcanieiit  of  tlic  Cahfornia  manufacturer  is  indicated  by  the  fol- 
lowing table.  coui])ile(l  from  the  I'.  S.  (\"nsus  of  1*)10,  which  shi>ws  tlie  per- 
centage of  the  total  value  of  the  iinuluct  in  thirteen  California  industries 
which  is  paid  in  wages,  as  compared  with  such  percentage  paid  in  the  same 
mdustries  in  nineteen  of  the  United  States  (or  such  of  them  as  are 
reported),  these  being  the  States  of  Indiana,  Connecticut,  Delaware,  Illinois, 
Iowa,  Kansas,  Kentucky,  Louisiana,  IMaryland,  Maine,  Massachusetts,  Michi- 
gan, Missouri.  Minnesota,  New  Jersey,  New  York,  Ohio,  Pennsylvania,  and 
Wisconsin.  These  figures,  of  course,  have  nothing  to  do  with  prices  of  the 
output.  They  show  that  whatever  the  prices  may  be,  the  percentage  of  that 
sum  which  goes  to  labor  as  wages  is,  except  in  the  two  lines  noted,  from 
1/10  of  1%  to  11  1/10  per  cent  greater  in  California  than  is  paid  on  the 
average  in  such  trades  in  nineteen  States.  It  of  course  follows,  that  the 
prices  of  the  products  in  California  must  be  correspondingly  higher  to  offset 
the  added  cost.  It  will  be  remarked  that  the  only  lines  reported  in  which 
California  wages  are  such  as  to  allow  export  on  a  basis  equal  with  the  rest 
of  the  country  are  the  industries  related  to  agriculture,  of  canning  or  preserv- 
ing dairy  products  and  fruits  and  vegetables.  These  manufactories  are  least 
under  the  influence  of  the  unions,  and  labor  in  them  is  mostly  paid  accord- 
ing to  the  output.  Their  development  has,  therefore,  been  rapid  and  they 
have  arisen  respectively  to  large  export  trade.  The  canned  milk  industry 
nearly  doubled  between  the  years  1909-10,  reaching  in  the  latter  year 
8,300,000  pounds,  while  fruit  and  vegetable  canning  amounted  to  6,259,294 
cases,  the  vegetable  output  nearly  doubling  between  1908-10,  and  that  of 
fruit  almost  doubling  since  1907,  with  4,008,549  cases  of  fruit  in  1910.  Upon 
the  other  hand  such  industries  as  lumbering,  in  which  the  union  or  its  in- 
fluence is  largely  exerted,  seem  to  have  declined  between  the  years  men- 
tioned (such  being  the  latest  figures  available).  In  1907  the  California  lumber 
cut  was  valued  at  $23,640,966.    In  1910  it  had  fallen  to  $18,050,000. 

Percentage  of  total  value  of  product  paid  in  wages  in  thirteen  industries 

in   California,  compared  with   such  percentage  paid  in   same  industries  in 

nineteen  States  of  the  United  States.    U.  S.  Census  1910,  Vol.  IX. 

Excess  of 
\9  States  percentage  paid 

(average)       California.       in  California. 

Bread  and  other  bakery  products 15.2  20  4.8 

Copper,  tin  and  sheet  iron  products 20.1  27.6  6.5 

Men's  clothing,  including  shirts   21.2  22.8  1.6 

Flour  mill  and  grist  mill  products 2.7                   3.1  .4 

Foundry  and  machine  shop  products   29.3*  29.9  .6 

*The  percentages  in  this  trade  display  great  diversity,  running  from  25.1  in  Indiana  and  25.4 
in  Kansas,  to  36.6  in  Massachusetts  and  37.5  in  Connecticut.  The  variance  may  be  accounted  for 
by  the  superior  character  of  the  manufactured  output  of  the  industry  in  the  northeastern  States  as 
compared  with  that  of  the  agricultural  States  noted,  which  are  more  nearly  similar  to  the  industry  in 
California.  In  the  Atlantic  States  mentioned  there  are  produced  in  the  shops  many  mechanisms 
in  which  the  value  of  tlie  labor  equals  or  exceeds  the  cost  of  the  material,  such  as  typewriters  and 
various  highly  wrought  instruments,  whereas  in  California  such  order  of  output  is  not  produced. 
W'here  the  character  of  the  product  is  about  the  same  in  California  as  elsewhere,  as  in  bakery 
products  and  beer,  the  California  laborer  receives  from  25%  to  33%  more  than  the  wage  share  of 
the  product  of  his  compeers  elsewhere. 

20 


Excess  of 

percentage  paid 

Ca 

lilornia 

in  California. 

11.2 

1.2 

4.1 

.1 

48.8 

6.9 

3.8 

.5t 

38.5 

11.1 

18.3 

4.5 

11.1 

3.0t 

30.6 

8.4 

19  States 
(average) 

Leather,  tanned,  curried  and  finished 10.0 

Slaughtering  and  meat  packing 4.0 

Cars  and  general  shop  construction  by  steam 

R.  R.  companies   41.9 

Butter,  cheese  and  condensed  milk   4.3 

Lumber  and  timber  products   27.4 

Liquors   (malt)    13.8 

Canning  and  preserving  14. 1 

Printing  and  publishing   22.2 

This  law  of  advancing  prices  with  rising  wages  I  have  heretofore  re- 
peatedly explained.  It  is  an  incident  of  the  law  of  economic  wage.  That  is, 
the  wage  which  the  product,  sold  in  a  market  of  free  competition,  can  afford 
to  pay,  and  which  the  proprietor  is  forced  to  pay  to  get  or  hold  his  labor. 
This  latter  is  determined  by  the  call  for  labor  into  other  industry ;  but  for 
this  call  the  proprietor  would  press  wages  to  the  line  of  the  laborer's  bare 
subsistence.  This  was  for  a  long  time  believed  by  economists  to  be  the  true 
law.  It  comprises  the  "iron  law  of  wages"  of  Lassalle,  and  is  the  principle 
upon  which  the  labor  union  exists  today.  It  is  commonly  believed  that  but 
lor  the  union,  wages  would  fall  to  the  limit  of  bare  subsistence  of  the  laborer. 
It  is  indeed,  only  upon  this  hypothesis  that  the  public  tolerates  the  union  at 
all.  If  this  were  widely  recognized  as  untrue,  public  opinion  would  sup- 
press the  union.  But  it  is  in  fact  wholly  untrue,  and  in  the  light  of  this 
knowledge,  the  union  with  its  great  repressive  and  compulsive  machine  is  a 
positive  harm  to  the  workman,  as  it  is  wholly  inefficient  to  procure  for  him 
more  than  economic  wage;  this  would  be  freely  paid  if  no  union  existed. 
The  factor  which  Lassalle,  Ricardo  and  other  economists  overlooked  was 
what  I  call  the  door  of  opportunity.  Just  as  opportunity  to  labor  abounds  or 
not  will  wages  be  good  or  poor.  The  door  of  opportunity  is  new  business, 
extensions  of  old  business,  enterprise,  all  of  which  depend  upon  the  free 
existence  in  the  nation  of  that  quality  called  initiative.  It  is  the  opportunity 
that  exists  among  the  people  for  industry  and  their  disposition  to  "do  things." 
It  has  relation  to  a  general  state  of  free  conditions,  and  to  complete  liberty 
of  the  citizen — not  untrammeled  license,  but  that  order  of  right  which  we 
cA\  hu-man  freedom,  and  which  I  have  gone  into  in  my  prior  writings.  This 
open  door  of  opportunity  may  be  expressed  in  one  word,  business;  this  is  a 
phrase  commonly  understood.  If  there  be  plenty  of  business  there  will  be 
plenty  of  work ;  in  other  words,  the  call  for  labor  will  be  active  and  heavy, 
and  it  is  this  call  that  insures  to  the  laborer  that  he  will  get  from  the  prop- 
rietor all  wages  that  the  product,  sold  in  a  free  competing  market,  can  afford 
to  pay.  It  is  therefore  to  the  highest  concern  of  the  laborer,  as  well  as  to 
the  business  man,  to  bring  about  a  condition  of  permanent  great  activity  in 
business.  Here  is  the  line  on  which  the  laborer  and  the  employer  stand 
together,  and  it  is  from  this  line  that  the  measures  of  reform  in  legislative 
and  industrial  conditions  should  move.     When  I  say,  therefore,  that  the  in- 

tLess  percentage  paid  in  California. 

21 


tcrcsts  of  the  employer  ami  tlic  laborer  are  luu'  and  the  same,  and  that  if  the 
laborer  were  shown  his  trne  interest,  he  would  stand  ])eside  the  emi)lover  in 
a  joint  jMirpose  of  iM-in^ini;-  ahont  conditions  which  produce  normal  business 
activity.  1  base  mv  assertions  on  this  fact,  viz.:  that  the  laborer,  union  or  no 
imion.  can  never  i^et  hit^iier  than  economic  \\ai;e,  and  that  he  can  best  i;"et 
this  in  a  state  of  i;-reat  business  activity,  which  the  employer  desires,  and 
which  can  never  be  had  so  long  as  the  union  exists  as  an  institution  interfer- 
ing with  the  operations  of  the  law  of  wages. 

And  the  reason  is  this:  that  just  as  soon  as  the  laborer  is  paid  higher 
than  economic  wage,  that  is,  wages  larger  than  the  share  of  the  product  that 
goes  to  labor,  that  belongs  to  labor,  the  added  cost  is  at  once  charged  over 
upon  the  product  and  is  collected  from  the  consumer.  Not  only  is  it  col- 
lected, but  it  is  collected  plus  all  the  expenses  which  the  added  cost  entails, 
viz. :  increased  cost  of  cai)ital  wherewith  to  pay  the  added  wage ;  increase  in 
cost  of  material ;  increase  in  cost  of  selling  the  product  at  higher  prices,  and 
so  on,  this  entire  process  tending  to  lessen  sales,  hence  lessen  products,  hence 
lessen  the  number  employed,  hence  increase  the  numbers  of  the  idle  army, 
Vvho  again  react  against  product  by  becoming  consumers  solely  and  not  pro- 
ducers, and  so  on  and  so  on.  From  this  single  stepping  aside  from  economic 
law  in  the  realm  of  wages,  there  is  at  once  set  up  a  series  of  changes  through- 
out the  whole  body  of  society,  much  like  the  waves  of  vibrations  passing 
through  the  air  when  you  strike  a  bell,  or  the  ripples  in  a  pond  when  you 
drop  a  stone,  save  that  these  as  they  recede  grow  weaker  while  they  get 
larger,  whereas  in  the  social  sphere  with  distance  from  the  foci  of  disturb- 
ance, the  waves  get  larger  and  stronger  to  do  injury. 

Let  us  see  now  for  a  moment,  how  this  law  of  wage  works :  Jones  is  a 
baker  selling  a  one  pound  loaf  for  five  cents.  Out  of  that  one  cent  goes  to 
labor,  three  cents  to  material,  and  one  cent  to  overhead  and  profit.  Smith, 
a  journeyman  baker  working  for  Jones,  is  not  content  with  a  cent  for  his 
labor,  he  wants  more  and  through  raise  in  wages,  shortening  hours,  and 
"better  W'Orking  conditions"  he  brings  about  a  state  of  things  that  puts  the 
labor  cost  of  the  loaf  up  to  a  cent  and  three-quarters.  Instead  of  getting  $3 
per  day  for  making  three  hundred  loaves,  he  now  gets  $4.50  in  cash,  to  which 
is  added  shorter  hours,  and  "better  working  conditions."  The  price  of  bread 
in  consequence  has  gone  up  to  5^4  cents  per  loaf,  being  JA  cent  for  increased 
labor,  and  34  cent  for  increased  overhead  by  reason  of  the  increase  in  wages. 
Bread  has  therefore  gone  up  16-2/3%.  Smith  has  been  spending  10%  of  his 
wages  in  bread,  this  amounting  to  thirty  cents  per  day ;  but  thirty  cents  will 
now  no  longer  buy  the  necessary  bread  for  the  family ;  it  takes  one-sixth 
more  money  wherewith  to  buy  the  family  bread,  hence  it  costs  five  cents 
more,  a  total  of  thirty-five  cents.  But  Smith  has  one  dollar  and  fifty  cents 
more  money  with  which  to  pay  the  extra  five  cents,  so  he  stands  one  dollar 
and  forty-five  cents  to  the  good,  and  besides  has  an  easier  time  at  his  job,  and 
Smith  is  very  happy.    That  is  the  way  the  union  looks  at  it. 

22 


But  Stiles,  working-  at  tailoring-  also  at  $3  per  day  for  twenty-six  days  in 
the  month,  or  $78  per  month,  and  also  spending  10%  of  his  wages  in  bread, 
finds  that  the  cost  of  his  bread  has  gone  up  five  cents  per  day,  in  a  month 
$1.50,  the  result  of  which  is  that  his  wages  by  the  operation  of  vSmith,  have 
been  afifected  by  what  is  tantamount  to  a  reduction  to  $76.50.  Stiles  does 
not  relish  this:  he  cannot  afiford  to  pay  $1.50  per  month  toward  Smith's  in- 
crease in  wages,  so  he  goes  to  his  employer  and  demands  a  raise  of  fifteen 
cents  per  day,  or  enough  to  bring  his  wages  up  to  $80  per  month.  The 
employer  pays  it  and  charges  this  increase  to  his  labor  on  his  manufactured 
product,  to  wit :  clothes ;  the  journeyman  butcher  does  the  same  thing  and  up 
goes  the  price  of  meat ;  the  grocerymen  do  likewise  and  away  go  groceries ; 
i:o  with  the  shoemaker,  the  fuel  man,  the  furniture  man,  the  lumber  and 
building  material  man,  whose  products  go  into  the  cost  of  building,  the  in- 
crease of  which  increases  the  price  of  rent,  and  so  on,  all  the  way  along  the 
line.  Now,  since  Smith  at  the  bakery  spends  his  entire  wages  in  these  things, 
he  finds  in  a  very  little  while  that  he  is  paying  higher  prices  for  not  only 
his  bread,  but  for  everything  else;  and  that  all  the  way  through  his  costs  of 
living  have  increased  so  that  he  can  no  longer  hold  on  to  the  standard  of 
living  he  had  set  for  himself  with  his  wages  at  $4.50  per  day,  and  he  must 
reduce  that  cost  or  call  upon  his  employer  for  more  pay.  He  cannot  of  course 
think  of  cutting  down  his  "American  standard  of  living,"  so  he  and  his  union 
demand  of  Jones  a  still  higher  wage.  Jones  pays  it,  and  again  bread  goes  up 
in  price ;  again  also  prices  rise  all  along  the  line  and  Smith  finds  himself  pay- 
ing in  turn  still  more  for  everything  he  consumes.  One  day  Jones  tells  Smith 
he  does  not  need  him  any  more ;  he  has  got  to  cut  down  help ;  bread  is  not 
selling  like  it  used  to  sell ;  people  say  it  is  too  high ;  they  are  eating  more 
corn,  oats  and  other  foods,  and  economizing  on  wheat  bread.  So  away  Smith 
goes  to  start  the  nucleus  of  the  idle  army,  soon  to  be  joined  by  Stiles,  and 
the  butcher  man,  pressed  out  of  employment  for  like  reason  of  contracting 
market,  and  providing  a  spectacle  for  the  union  to  concern  itself  over,  for 
the  Socialist  to  cry  out  against  the  capitalist  Jones  about ;  while  poor  Jones, 
oppressed  by  all  phases  of  difficulties  in  trying  to  carry  on  business,  his 
domestic  as  well  as  business  costs  increased  along  all  lines,  presses  his  nose 
ever  tighter  upon  the  grindstone,  and  works  faster  the  treadle.  Presently 
along  comes  to  Jones  a  man  like  myself  who  says  to  him.:  "Jones,  the 
trouble  with  you  is  that  you  let  things  get  away  from  you  when  you  allowed 
Smith  and  his  union  to  force  you  to  raise  wages  three-fourths  of  a  cent  a 
loaf.  In  that  day  you  had  a  good  business  and  it  was  increasing;  you  were 
taking  on  men,  not  letting  men  off.  Stoaks  up  the  street  at  the  delicatessen 
was  buying  from  you  500  loaves  a  day  to  stuff  dressed  ])oultry  with  ;  now  he 
roasts  his  fowl  without  stuffing.  Noaks  at  the  candy  shoj)  was  taking  200 
loaves  to  CI  invert  into  toasts  and  confections,  lie  doesn't  do  that  an\-  more, 
liread  is  too  high.  \(>u  have  lost  _\-our  sliip])ing  trade  to  rniii])ville,  where 
the  women  are  now  buying  Hour  and  making  their  own  bread  to  save  ex- 
pense; the  same  is  the  case  with  your  erstwhile  trade  at  the  llollows.  and  at 

23 


Tessiips  Crossing,  there  the  stores  are  hriui^iiiL;'  in  bread  fr(»m  Nevada,  an 
open  sliop  eountry,  aiul  arc  ^ettin;;"  it  laid  down  for  half  a  cent  less  a  loaf 
t'.ian  you  demand  ;  all  this  business  is  i^onc ;  you  don't  l)uy  half  the  flour  yon 
used  to  anil  the  mill  has  cut  off  half  its  shift;  the  barrel  factory  is  shut  down 
for  three  months;  over  at  Frank's  clothino-  factory  they  let  out  iifty  hands 
last  week,  people  are  not  wearing  the  clothes  tiiey  used  to ;  meat  has  become 
a  delicacy,  anil  Snyder  is  doing-  his  butchering  himself.  What  you  have  got 
to  ilo  is  to  get  rid  of  the  union  and  take  the  control  of  yom-  business  again 
into  your  own  hands.  \Miat  you  are  dealing  with.  Jones,  is  a  public  matter; 
the  whole  of  societv  is  being  held  back  in  its  development  and  its  civilized 
progress  bv  this  condition.  Everyone  is  affected  by  it.  The  jjuI^Hc  will  not 
sustain  the  union  in  this  sort  of  thing  when  they  understand  it.  Every 
employer  will  get  courage  when  he  knows  what  is  the  real  trouble  and  will 
join  hands  with  us  to  bring  public  ojMuion  and  the  force  of  law  to  our  aid 
with  whatever  legislation  we  may  need  in  the  premises.  Take  this  pamphlet. 
Jones,  and  read  it :  you  will  find  the  whole  process  of  how  you  got  into  your 
predicament  traced  carefully  out.  so  you  will  fully  understand  it  and  see  the 
remedy.  Come,  let  us  go  to  Frank.  Snyder  and  the  rest,  and  get  them  to 
join  our  Economic  Association  which  we  have  organized  to  spread  enlighten- 
n'ent  and  correct  this  condition.  It  will  cost  you  fifteen  cents  a  year." 
"Don't  talk  to  me,''  cries  Jones,  lifting  his  hands  and  bringing  them  down 
beside  his  head  smartly  on  the  grindstone,  "Fm  too  busy.  I  don't  have  time 
to  read.  We've  got  too  many  associations  now.  Your  idea  is  nebulous  ;  these 
things  work  around  some  way  and  adjust  themselves.  Fm  expecting  this 
town  any  minute  to  shde  right  into  the  bay.  W'hat  Fm  going  to  do  is  to  get 
out  of  business,  and  to  hell  with  it.  Fve  got  enough  for  the  rest  of  my  life 
to  keep  me  and  Fm  not  going  to  stay  in  the  game  any  longer.*  That's  my 
answer:  come  again,  Fll  think  it  over." 

^Manifestly  Smith,  to  have  acquired  any  advantage  from  his  raise  in 
wages,  would  had  to  have  stipulated  that  the  price  of  bread  should  not  be 
raised ;  and  had  he  done  that,  there  would  have  been  no  raise  of  wages,  for 
his  demands  for  raise  would  simply  have  been  a  demand  against  the 
employer's  profits,  which  if  granted  would  have  driven  the  employer  out  of 
business,  for  the  latter  would  not  have  continued  to  conduct  business  in 
which  there  was  no  profit  to  himself,  merely  for  the  sake  of  employing  Smith 
and  his  fellow  unionists. 

The  prime  fact  before  the  California  manufacturer  is  that  he  must  rid 
his  works  of  the  union,  and  if  necessary  to  enable  him  to  compete,  he  must 
reduce  wages.  Nor  need  he  feel  any  compunction  about  so  doing.  Reduced 
wages  as  I  have  shown  will  reduce  prices  of  commodities  and  this  will  reduce 
cost  of  living,  in  so  far  as  many  articles  go,  and  will  tend  to  such  reduction  in 
all  directions.     It  will  immediatclv  give  us  larger  markets  and  tliis  will  call 


*Mr.  G.  X.  Wciiilling  of  San  Francisco  states  that  tliere  are  a  luindred  men  within  the  realm 
of  his  knowledge  and  acquaintance  in  the  United  States,  the  heads  of  industries,  who  have  withdrawn 
from  business  and  become  idlers  because  "business  has  become  a  thing  which  a  man  would  rather  get 
out  of  than  to  get  into";  the  energies  of  these  men  have,  therefore,  been  withdrawn  from  affairs  by  the 
plight  that  has  involved  industry. 

24 


forth  amongst  us  business  activities  in  many  avenues;  large  numbers  of 
men  who  are  now  unemployed  will  be  called  into  service,  and  the  immi- 
gration which  will  follow  will  further  reduce  living  cost  through  providing 
abundance  of  agricultural  products,  which  in  turn  will  stimulate  business. 

Why  do  business  men  stand  here  in  San  Francisco  with  their  hands  tied 
and  their  tongues  silent,  and  observe  the  great  opportunities  for  production 
that  exist  about  them,  and  for  trade  across  our  ocean  circumvented  or  passing 
into  the  hands  of  others  elsewhere,  or  worse  yet,  not  developed  at  all !  Con- 
sider that  enormous  field  for  trafific,  the  Orient,  that  lies  yonder  facing  us, 
to  which  we  are  almost  as  strange  as  though  it  were  upon  another  planet. 
Contemplate  what  immeasurable  business  we  would  have  here  in  San  Fran- 
cisco and  throughout  California  if  the  natural  course  of  demand  and  supply 
were  permitted  to  have  sway.  But  it  is  kept  away  from  us  by  two  popular 
mistakes,  viz. :  the  idea  that  the  higher  the  wages  in  the  realm  of  industry 
the  more  the  recipient  receives  for  his  labor ;  and  the  idea  that  a  man  coming 
into  the  country  to  work  takes  the  job  away  from  the  workman  here,  and 
lowers  wages  generally.  The  immigrant  does  not  and  cannot  lower  wages, 
he  raises  wages ;  he  does  not  take  the  job  away  from  the  workman  here,  he 
creates  new  jobs  for  the  unemployed  workmen.  This  occvirs  through  the 
immigrant  entering  production  and  creating  a  surplus  above  his  own  con- 
sumption. This  surplus  enters  industry  as  material,  calling  upon  other  labor 
to  work  it  up  into  various  forms  or  to  transport  it  for  ultimate  consumption. 
The  immigrant  in  industry  operates  precisely  as  an  increase  in  domestic 
population  would  act  under  free  conditions,  that  is,  the  more  people  there  are 
in  co-operative  effort,  the  easier  it  is  for  each  and  all.  If  this  were  not  the 
law,  if  it  were  an  injury  to  one  man  for  another  to  come  into  existence, 
society  would  have  come  to  an  end  long  since.  Under  labor  unionism  such 
is  a  fact,  as  see  the  rule  against  apprentices,  the  closing  of  registry  books 
against  men  entering  the  city  from  abroad,  and  similar  operations.  A  man 
in  Oakland  may  not  come  to  San  Francisco  and  get  a  job  even  though  he  be 
a  union  man  and  have  a  card,  if  there  be  any  union  man  in  San  Francisco 
out  of  a  job,  which  of  course  means  that  the  Oaklander  may  not  come  at  all, 
while  the  outlander,  the  man  in  the  East,  is  kept  away  by  all  sorts  of  warn- 
ings and  threats.  The  point  is  exemplified  in  my  pamphlets,  "Japan's  Mes- 
sage to  America"  and  "Our  National  Tendency  and  Its  Goal."  If  the  law 
which  these  writings  present  were  understood  by  public  opinion,  there  would 
be  an  end  of  immigration  restriction  and  exclusion.  As  for  the  idea  that 
high  wages  in  coin  means  high  wages  in  fact,  I  have  shown  the  error  of  that 
hypothesis.  The  wages  one  receives  is  not  the  coin  but  what  he  can  buy 
with  the  coin ;  wages  put  at  a  rate  so  high  that  the  price  of  the  product  must 
be  increased  to  pay  it,  only  harm  the  laborer  who  receives  them.  The  era 
of  high  wages  which  began  more  than  a  decade  ago,  has  its  corollary  in  the 
out-of-work  army.  It  has  become  a  great  standing  army  in  winter,  besetting- 
all  cities,  and  in  summer  it  is  a  ragged,  tramping  horde,  filling  the  highways 
with  stragglers.     These  are  pcf)plc  who  arc  completely  out  of  jobs  ;  they  are 

25 


the  helpless  element  who  must  needs  work  under  ca])t;iins  of  induslrv  it  tlK-y 
work  at  all.  who  must  have  work  jirovided  for  them  hv  the  industrial  opera- 
tions of  society,  who  have  not  the  initiative  to  create  jobs  for  themselves.  lUit 
there  is  another  class  who  do  not  camp  behind  board  fences  in  winter,  or 
sleep  under  trees  in  summer,  who  are  nevertheless,  members  of  the  idle 
army.  They  comprise  thousands  ui)on  thousands  of  us  who  experience 
need  in  varying-  ways,  from  actual  want  to  "not  havinp^  as  much  as  T  would 
like  to  have."  and  who  can  tind  in  their  occupations  very  little  to  do  u]:»  to  the 
stag^e  of  being-  '"not  as  busy  as  I  should  like  to  be."  In  other  words,  the 
three-quarters  idle,  the  half  idle,  the  quarter  idle.  I  think  aside  from  the 
handful  who  are  rich  or  in  safe,  comfortable,  salaried  positions,  this  latter 
class  embraces  about  all  of  us.  Tt  certainly  includes  every  man  who  is  in 
business  on  his  own  account,  the  large  majority  of  whom  are  struggling  to 
make  ends  meet.  Will  anyone  say  that  these  are  days  of  general  prosperity 
and  abundance  in  California,  wdien  wealth  is  largely  and  widely  diffused,  or 
that  there  have  been  any  such  days  in  this  State  for  years  past!  and  if  wealth 
be  not  abundantly  and  w'idely  distributed,  is  it  possible  that  there  are  some 
capitalists  or  monopolists  who  are  getting  it  all,  or  flagrantly  undue  pro- 
]X)rtions?  Where  are  the  great  fortunes  that  are  building  up  in  the  State 
today?  Who  is  "making  money"  anywhere?  Several  years  ago  a  small 
group  of  men  made  fortunes  in  the  oil  fields,  but  the  latest  ruling  of  the 
Public  Utilities  Commission  in  the  "oil  pipe  cases."  will  about  successfully 
eliminate  all  repetitions  of  this  sort  of  thing  in  the  future.  So  much  for  the 
days  of  high  wages. 

Let  us  now  turn  to  the  era  of  low  wages  in  California  and  take  a  com- 
parative view  of  that.  This  is  the  decade  from  1850  to  1880,  or  the  time  of 
Chinese  immigration  in  California.  Who  is  there  living  today  who  can  cast 
liis  mind  over  that  period  and  not  experience  the  feeling  that  those  were  the 
days  when  California  was  a  land  flowing  with  milk  and  honey ;  when  oppor- 
tunity abounded,  when  abundance  existed  upon  every  hand,  when  almost 
everything  was  cheap,  and  when  wages,  though  low  compared  with  the 
present,  were  from  the  standpoint  of  living  costs  genuinely  high,  far  higher 
than  at  present.  These  were  the  days  when  anyone  in  business  in  this  State 
could  make  money.  They  were  the  days  of  the  fortunes  of  the  Crockers, 
Iluntingtons  and  Stanford,  made  in  railroading;  of  Phelan  in  merchandis- 
ing; of  Haggin-Tevis  in  general  business;  of  Spreckels  in  sugar;  of  Flood 
and  Mackay  in  mining.  These  and  others  were  great  fortunes,  wdiile  thou- 
sands made  moderate  fortunes  and  tens  of  thousands  acquired  competencies. 
It  was  the  day  of  great  industries  in  the  State  which  are  now  practically 
extinct ;  of  a  boot  and  shoe  industry  with  twenty-six  hundred  employees  and 
$.3,000,000  of  annual  product ;  of  a  cigar  manufacturing  industry  employing 
thirtv-flve  hundred  hands,  and  shii)])ing  cigars  East  by  car-load  lots;  (jf  a 
woolen  industry,  producing  Ijlankets.  shawls,  flannels  and  cloakings,  with 
four  mills  in  San  Francisco,  eight  elsewhere  in  the  State,  and  an  invested 
capital  of  four  millions  of  dollars.     It  was  the  thin  edge  of  that  vast  woolen 

26 


manufacturing-  business  that  was  in  store  for  San  Francisco  and  California 
liatl  we  been  permitted  to  have  gone  forward  in  our  course  at  that  time  and 
Oriental  immi_o-ration  been  left  undisturbed,  when  we  would  have  taken  in 
through  the  (iolden  ("late  the  wools  of  South  America  and  Australia  and 
sliipped  our  product  to  .\sia.  and  to  our  own  Eastern  markets  and  over  the 
world.     Mrs.  Coolidge,  writing  in  1909,  says: 

"Before  the  Kearny  period  the  State  was  fast  becoming  the 
chief  supply  depot  for  the  Western  and  Southwestern  States,  for 
British  Columbia  and  the  Hawaiian  Islands.  The  incessant 
strikes  and  labor  agitations  from  1876  onward  demoralized  the 
trade  and  caused  a  partial  transfer  to  Eastern  manufacturers. 
Some  authorities  say  this  was  the  chief  cause  of  the  decline  of 
the  trade,  from  which  it  has  never  recovered.  Certainly  the  fact 
is  indisputable  that  whereas  boots  and  shoes  ranked  fourth 
among  the  manufactures  of  the  State  in  1870,  today  the  industry 
has  not  even  a  place  among  the  sixteen  leading  industries." 

With  business  in  all  lines  of  the  State  ra])idly  increasing,  with  white 
immigration  into  the  State  accelerating  in  great  strides, -j-  with  our  trade  with 
China  rising  at  the  rate  of  six  millions  per  year,*  and  trade  with  every 
other  country  going  forward  in  proportion,  we  were  moving  toward  a  con- 
dition that  had  it  been  permitted  to  have  continued  would  by  this  time 
have  made  San  Francisco  a  city  as  great  as  New  York,  and  California  a 
State  as  great  as  half  the  States  of  the  Eastern  seaboard.  The  crime  which 
the  foolish  disturbers  against  the  incoming  of  the  Asiatic  peoples  have  visit- 
ing upon  the  people  of  this  State  in  loss  and  sufTerin-g,  in  deprivation  of  that 
Vi^hich  but  for  this  wrongful  restriction  would  have  ensued  can  never  he 
calculated,  and  this  injury  continues  today ;  and  unless  public  opinion  can  be 
changed  by  diilusing  the  light  of  truth  which  will  cure  the  evil  of  immigra- 
tion restriction,  it  will  in  the  not  distant  future  bear  its  fruits  in  the  way 
which  inevitably  attends  all  persistent  violation  of  natural  laws.  The  activ- 
ity and  prosperity  of  the  Chinese  immigration  period  compared  with  the 
stress  of  the  present,  was  due  to  the  single  fact  that  wages  then  approxi- 
mated natural  as  distinguished  from  the  artificial  wages  now  existing.    There 

t  The  white  population  of  the  State  increased  in  the  jiresence  of  Chinese  inimigraf ion  from 
323,177  in  1860,  to  767,181  in  1880;  about  the  same  period  the  Chinese  increased  from  34,933  to 
75,218.  The  negroes,  an  unskilled  working  class,  increased  during  the  same  period  from  4,086  to 
6,018. 

*Trade  between  the  United  States  and  China,  nearly  all  of  which  transpired  through  San  Fran- 
cisco, started  in  1850,  and  by  1860  the  imports  and  exports  totaled  $119,000,000.  The  decade  between 
1860-70  closed  with  $142,000,000,  an  increase  of  $23,000,000  or  an  advance  of  20  per  cent.  The  decade 
between  1870-80  closed  with  $199,000,000  an  advance  of  $57,000,000  and  an  increase  of  40  per  cent. 
Then  came  the  exclusion  laws,  enacted  in  1883.  The  decade  between  1880-90  showed  $213,000,000,  an 
increase  of  but  $14,000,000  and  an  advance  of  only  7  per  cent.  The  decade  from  1890-1900  closed 
with  $169,000,000,  a  loss  of  $44,000,000  and  a  decline  of  over  20  per  cent.  The  trade  was  seemingly 
dying  out,  when  the  Japanese-Russian  war  occurred  and  started  a  new  impetus  upon  the  traffic.  The 
significance  of  the  vast  percentages  of  increase  in  the  China  trade  occurring  at  a  period  as  far  back  as 
the  seventies,  may  be  realized  when  it  is  noted  that  in  1897  the  total  sea  traffic  of  San  Francisco,  being 
imports  and  exports,  domestic  and  foreign,  was  $85,126,791.  In  1909  it  had  increased  to  $108,690,619, 
an  excess  of  $23,563,928.  In  twelve  years  the  trade  had  gone  forward  at  a  rate  of  less  than  2  per  cent 
per  year.  The  Oriental  trade  which  had  in  it  the  meaning  and  promise  of  great  business  iti  the  future, 
toward  which  it  was  yearly  progressing,  grew  out  of  the  presence  of  free  migration  to  this  country 
of  the  Oriental  peoples.  It  was  choked  off  by  the  laws  of  exclusion.  San  Francisco  then  ceased  to  be 
the  Oriental  entrepot,  destined  to  control  the  trade  of  the  entire  Orient,  not  only  with  this  country 
but  with  the  world.  Since  that  day  the  trade,  after  severe  declines  following  both  Chinese  and  Japanese 
exclusion,  has  come  forward  to  some  extent;  but  the  increase  of  trade  of  the  countries  of  the  Orient 
with  the  United  States  has  not  equaled  in  ratio  their  increase  with  the  other  foreign  nations  of  the 
world;  whereas,  but  for  exclusion,  our  trade  with  them  would  have  shown  increases  far  in  excess  of 
their  increases  with   other  nations. 

27 


was  relatively  hut  little  ditYerence  in  washes  between  here  and  the  luist  then 
and  now.  San  Francisco  wages  were  as  much  as  35  per  cent  higher  than  in 
the  East  at  that  time,  and  they  reach  about  tiie  same  percentage  higher 
today.  But  in  that  jieriod  wages  in  both  parts  of  the  country  were  lower 
than  they  arc  now,  in  many  instances  a  hundred  per  cent  lower.  It  is  the 
artificial  high  wage  which  has  caused  the  trouble,  and  which  if  unchecked 
must  proceed  to  its  ultimate  goal  of  driving  the  nation  into  the  Socialized 
State ;  for  these  wages  will  continuously  increase,  ever  narrowing  the  field  of 
industry  as  they  arise,  producing  all  the  phenomena  of  decadence  in  the 
out  of  work  mass  continuously  multiplying  in  numbers,  and  extending  its 
proportion  to  the  total  of  population,  thus  eating  as  a  canker  into  the  very 
heart  of  civilization,  while  the  general  strain  of  hard  times  threads  all 
society.  The  process  of  raising  wages  and  shortening  hours  is  moving  over 
the  nation  with  amazing  rapidity.  Bulletin  No.  143  of  the  United  States 
I^epartment  of  Labor  gives  the  figures  in  percentages  for  a  few  trades 
covering  a  period  of  seven  years,  from  1907  to  1913,  from  which  the  follow- 
ing table  is  compiled : 

T\BLE  FOR  THE  ENTIRE  UNITED  STATES  SHOWING  IN  PER- 
CENTAGES THE  REDUCTIONS  IN  NUMBER  OF  THE  WORK- 
ING HOURS  PER  WEEK  AND  INCREASE  RATE  OF  WAGES 
PER  HOUR  SINCE  1907  UPON  THE  BASIS  OF  WAGES  AND 
HOURS  ON  MAY  15,  1913,  THE  LATTER  YEAR  REPRESENT- 
ING 100%  OF  BOTH  HOURS  AND  WAGES  IN  25  DIFERENT 
TRADES. 


TRADE 


Hrs.  per  wk.     Wages  per  hr. 

in    1907    on        in  1907  on 

basis    of       I       basis  of 

100%    in    1913  100%    in    1913 


Per  cent 

decrease  in  No. 

of  working  hrs. 

per  wk. 

1907-1913 


Per  cent 

increase  in 

wages  per  hr. 

i  from  1907  to 

1913 


Bakers  (first  hands) .... 

"         (second  hands) .  . 

"        (third  hands) .  .  . 

Building  Laborers 

Carpenters 

Cement  Workers 

Hod  Carriers 

Painters 

Plumbers 

Steam  Fitters 

Stone  Masons 

Structural  Iron  Workers 

Granite  Cutters 

Blacksmiths 

Boiler  Makers 

Iron  Moulders 

Machinists 

Core  Makers 

Pattern  Makers 

Bookbinders 

Compositors  (Book) .... 

Electrotypers 

Press  Feeders 

Pressmen  (Cylinder) .... 
Sheet  Metal  Workers . . . 


% 
123.0 
108.5 
112.6 
102. 
101 
102 
103. 
102. 
101 
102. 
101.8 
103.2 
103.3 
102.9 
101.8 
101.8 
102.8 
103.0 
103.4 
112.5 
100.0 
104.6 
110.9 
106.4 
101.9 


78.09 

75.06 

66.08 

90.07 

88.04 

92.00 

93.02 

84.07 

88.00 

84.9 

91.3 

87.4 

90.2 

87.9 

85.6 

88.0 

89.8 

82.3 

88.7 

83.4 

88.6 

82.1 

79.4 

81.6 

84.5 


% 

23.0 

8.5 

12.6 


2.6 
1.3 
2.8 
3.1 
2.6 
1.4 
2.4 
1.8 
3.2 
3.2 
2.9 
1.8 
1.8 
2.8 
3 
3 
12 


0 
4 
5 
0.0 
4.6 
10.9 
6.4 
1.9 


% 
21.01 
24.01 
33.02 

9.03 
11.06 

8.00 

6.08 
15.93 
12.00 
15.10 

8.70 
12.60 

9.80 
12.10 
14.40 
12.00 
10.20 
17.70 
11.70 
16.60 
11.40 
17.90 
20.60 
18.40 
15.50 


28 


Tlicsc  fio-urcs,  while  tlicy  stretch  between  two  periods,  arc  not  the  result 
of  sudden  rises ;  the  changes  show  a  graduated  though  rapid  movement, 
not  an  avulsion.  The  wages  go  higher  and  higher,  step  by  step,  year  after 
year,  throughout  the  whole  recorded  period.  Take  the  sheet  metal  workers, 
for  instance:  treating  1913  as  the  basis  the  figures  run  higher,  as  follows: 
1912,  3.8%;  1911,  4.6%;  1910,  7.9%;  1909,  11.2%;  1908,  13.4%  1907, 
15.1%;  and  presumably  if  the  figures  were  carried  further  back  they 
would  show  relatively  the  same  phenomenon.  Consider  what  this  will  mean 
for  the  nation  should  it  continue  for  fifty  years  ;  and  what  is  fifty  years  in 
the  life  of  the  nation?  Is  it  not  apparent  that  this  operation  will  draw  a 
crisis?  We  can  compute  its  approach.  Ascertain  the  number  of  the  per- 
ennially idle  and  casually  employed  multitude  in  proportion  to  the  total 
population  of  the  country,  and  watch  this  number  extend  its  proportion  year 
by  year ;  parallel  this  with  the  concomitant  growth  and  extension  of  the 
functions  of  the  State  to  absorb  industry  in  order  to  give  people  work,  and 
you  will  get  a  fajr  idea  of  how  long  it  will  take  to  evolve  the  socialist 
state,  and  to  blot  out  civil  liberty  with  centralized  despotism.  In  1907  the 
casually  employed  of  London,  the  people  who  get  from  one  hour  to  two 
or  three  days  work  out  of  seven  days,  totaled  7  per  cent  of  the  population. 
The  whole  of  England,  clutched  in  the  iron  grasp  of  unionism,  contained 
over  a  million  registered  paupers — people  who  did  not  know  from  where 
they  would  get  another  meal ;  and  this  gangrene  was  pushing  rapidly  for- 
ward into  the  whole  bulk  of  the  people.  One  would  not  have  to  be  very 
wise  or  knowing  to  estimate  the  distance  in  time  when  God  in  His  mercies 
would  send  them  war  to  kill  ofif  some  millions  of  them  and  destroy  their 
properties,  so  that  in  the  business  of  reconstructing  there  would  be  some- 
thing amongst  them  to  do  that  would  enable  the  enlightenment  that  they 
possessed  to  keep  each  other  from  starving,  and  to  rescue  their  civilization 
from  its  retrograde  movement  into  the  beast. 

While  the  figures  of  the  above  table  show  astonishing  rises  of  wages, 
and  serious,  if  not  alarming  shortening  of  hours  yet  their  real  force  cannot 
be  realized  without  reference  to  other  figures  which  are  wholly  absent  from 
the  Department  of  Labor  reports,  that  is,  tables  of  the  relative  outputs  per 
man  corresponding  to  the  respective  rates  of  wages  and  hours.  To  some 
of  this  rise  in  wages,  and  even  possibly  in  some  instances  to  shortening  of 
hours,  the  laborer  is  legitimately  entitled ;  this  is  where  labor-saving  machin- 
ery has  entered  the  industry  and  brought  to  the  laborers  ability  to  perform 
a  vastly  greater  service  with  the  same  or  a  less  degree  of  efifort.  Take,  for 
instance,  the  introduction  of  the  pneumatic  riveting  machine.  Prior  to  the 
use  of  this  mechanism  bolts  were  driven  by  hand,  a  riveters'  gang  compris- 
ing two  drivers  and  a  boy  as  heater.  The  men  were  paid  by  the  rivet.  The 
air  driver  did  away  with  one  man  and  doubled  the  number  of  bolts  thereto- 
fore driven  by  the  two  men.  The  men  were  still  paid  by  the  bolt,  but  a  man 
with  a  machine  could  make  more  than  by  hand,  though  he  was  ]):iid  less 
per  bolt.     Mere  the  man  was  exhausted  at  evening  with  his  ten  hours  of 

29 


ariluous  toil ;  the  machine  canio  aloiifj^  ami  g;ave  him  more  money  with  lesi^ 
tffort  in  a  shorter  day  and  with  a  vastly  larger  out])ut.  The  true  test  of 
nhat  wages  the  riveters  working  at  the  machine  would  he  entitled  to  receive 
would  have  hrcn  wliat  the  riveter  could  have  heen  gotten  for  in  a  free 
condition  of  industry  without  the  interference  of  (he  union.  The  machine 
has  often  lowered  wages,  or  would  have  lUmc  so  hut  for  the  union  estah- 
lishing  an  artificial  price.  Take  a  performance  requiring  particular  skill 
at  which  the  laborer  has  arrived  through  long  servitude ;  a  machine  comes 
into  existence  which  performs  that  feat  by  moving  a  lever.  A  boy  may 
do  this;  yet  under  the  rules  of  the  union  the  expensive  man.  otherwise 
displaced  by  the  machine,  would  have  to  be  put  at  the  lever  at  his  full,  and 
possibly  at  increased  pay.  Natural  and  free  industrial  conditions  would  put 
the  boy  at  the  handle  and  turn  the  man  to  some  employment  equal  to  the 
powers  of  his  mind,  not  stunt  the  latter  in  its  further  development  by  en- 
slaving him  at  a  trivial  thing.  With  calls  for  labor  everywhere,  such  as 
free  conditions  would  create,  this  man  could  find  ready  and  remunerative 
work,  so  that  he  would  sufter  no  hardship  through  being  displaced  by  the 
machine,  the  efifect  of  which  on  industry  is  to  create  greater  abundance  of 
v,  ealth,  hence  a  larger  field  of  employment. 

Under  natural  conditions  wages  would  gradually  rise  while  prices 
lowered,  and  hours  of  labor  would  also  fall  to  some  reasonable  fixed  num- 
ber. It  might  be  ten,  or  nine,  or  may  even  be  eight ;  for  assuredly  there 
is  no  requirement,  under  the  development  which  industry  has  attained 
through  its  mechanisms  and  methods,  for  men  working  from  sunrise  to 
sunset,  as  was  the  case  in  the  earlier  eras  of  the  country.*  But  the  iniions 
fix  no  number  of  hours  as  a  declaration  of  the  ultimate  day's  work.  In  my 
"Industrial  Unrest"  I  note  the  Socialist  orator  who  advises  us  that  it  has 
been  authoritatively  computed  that  if  every  one  turned  to,  with  the  exist- 
ing equipment  of  mills  and  systems,  and  worked  daily  for  twenty-five 
minutes,  there  would  thereby  be  sufficiently  produced  for  all  the  needs  of 
society.  They  wish  less  working  hours,  always  less,  with  no  definition  of 
where  the  stop  shall  be  this  side  of  zero.  Long  before  the  processes  of 
the  union  shall  have  reached  whatever  ideal  of  hours  may  be  their  goal, 
the  direction  shall  have  been  broken  by  war.  The  aim  of  the  union  is  not 
a  settling  down  to  rational  hours. as  would  attend  the  natural  and  free 
course  of  industry,  but  it  is  thrust  to  the  farthest  extent  for  the  very  purpose 
of  lessening  output,  upon  the  false  as.sumption  that  scarcity  of  product  is 
necessary  to  maintain  demand  for  reproduction,  for  replenishment  of  supply ; 
for,  to  the  concept  of  the  union,  it  is  through  this  that  demand  for  labor, 
hence  opportunity  for  employment,  arises.  It  is  the  business  of  the  union 
to  keep  things  scarce  in  order  that  there  shall  always  be  an  active  call  for 
new  supplies.  I  have  explained  the  mistake  of  this  quite  fully  in  my  prior 
vvTitings,  and  shall  not  enter  upon  it  here.  It  instances  one  of  the  many 
errors  into  which  industry  and  business  is  led  by  the  false  economic  doctrines 

*See  McMaster,  "History  of  the  People  of  the  United  States,"  \'ol.  \',  page  85. 

30 


of  the  union.  Upon  the  whole,  however,  it  may  be  said  concerning  the 
figures  of  the  above  table,  that  they  show  wages  pushed  and  hours  de- 
pressed far  beyond  the  natural  line  to  which  they  would  rise  and  fall  under 
free  industry,  and  display  a  condition  only  possible  through  the  union 
which,  as  I  have  stated,  if  not  checked  through  an  intelligent  comprehension 
by  the  business  world  of  the  forces  it  has  set  in  motion,  will  change  the 
character  of  industry  in  the  direction  and  with  the  consequences  I  have 
shown. 

It  is  not  to  be  asserted  that  during  the  period  of  Chinese  immigration 
no  people  were  out  of  work  in  California.  Seasonal  unemployment  has 
always  existed.  In  the  East  this  is  due  to  cessation  of  building  operations 
in  winter;  during  bad  weather  bricklayers  cannot  lay  brick;  when  the 
ground  is  deep  with  snow,  foundations  are  not  dug ;  on  the  Great  Lakes 
shipping  has  ceased  in  winter,  for  the  lakes  are  frozen.  In  California  as 
elsewhere  there  is  a  period  when  ranch  work  subsides  and  throws  large 
numbers  of  men  out  of  employment.  Under  society  governed  by  true 
economic  laws,  such  as  our  Association  is  endeavoring  to  bring  about, 
where  the  demand  for  labor  is  always  greater  than  the  supply,  winter  would 
be  the  period  of  most  activity  in  the  factories,  for  then  plenty  of  men  could 
be  had ;  while  during  the  balance  of  the  year  the  country  would  call  them 
forth.  The  laborer  would  work  during  the  winter  in  the  city  and  during 
the  spring,  summer  and  until  after  harvest,  on  the  farms  throughout  the 
State.  Unemployment,  seasonal  or  other,  is  a  proper  subject  for  consider- 
ation of  the  State,  and  the  proposals  now  in  Congress  to  move  the  post- 
ofihce  system  to  bear  on  bringing  men  needing  jobs  and  jobs  needing  men 
together,  is  a  proper  State  function.  Diffusion  of  information  is  always 
the  rightful  province  of  the  State,  and  falls  under  the  head  of  public  safety ; 
whether  such  information  be  the  education  of  the  child,  the  papers  of  the 
Agricultural  Department  on  "How  to  Stack  Hay,"  the  consular  reports  on 
where  to  sell  goods,  or  the  Department  of  Labor  or  postofifice  advices  on 
where  to  get  a  job — all  fall  within  the  true  scope  of  government,  and  are 
in  no  sense  an  incursion  upon  the  rights  of  the  individual,  as  always  is  the 
case  when  government  enters  upon  the  performance  of  utilitarian  business, 
or  tries  to  curb  the  profits  of  the  operators  ensuing  therefrom. 

There  was,  however,  from  time  to  time  loud  assertion  in  San  Fran- 
cisco during  the  Chinese  immigration  period  of  men  in  large  numbers 
out  of  work,*  when  in  fact  no  such  condition  existed.  That  any  one  was 
out  of  work  was  always  charged  to  the  fact  that  Chinese  were  employed. 

*The  San  Francisco  Bulletin  stated  in  1878  that  Chinese  cigarmakers  were  receiving  $6.00-$6.50 
per  1,000  as  against  $4.00  per  1,000  paid  in  the  East.  In  1885  the  wages  of  Eastern  male  cigarmakers 
ranged  between  $1.50  in  West  Virginia  an<l  $2.25  in  ConnecticvU  ;  of  female  cigarmakers  between  $1.00 
and  $1.50.  In  California  tlie  wages  of  white  men  nveraged  $2.00  per  day  and  of  Chinese  in  factories 
from  $1.00-$1.50  per  day.  During  this  year  the  White  Labor  League  of  California  asked  the  cigar 
manufacturers  to  replace  Cliinese  makers  with  white  men  in  order  to  give  work  to  the  unemployed. 
Twenty-one  firms  agreed  to  do  so  provided  the  whites  were  competent  men  and  agreed  to  pay  the 
union  prices  of  New  York  City.  It  was  at  once  discovered  tliat  there  were  very  few  unemployed 
cigarmakers  in  California  and  the  unions  sent  East  for  men.  I'our  lunulred  came  out  on  tliis  agree- 
ment to  worl<  for  one  year,  and  109  came  on  their  own  account.  Two  hundred  and  forty  returned 
ICast  shortly;  the  manufacturers  said  because  they  were  incompetent,  tlie  unions  said  because  the 
manufacturers  violated  the  agreement.  Shortly  afterward  the  remainder  of  the  imported  men  de- 
manded an  increase  in  wages;  the  manufacturers  thereupon  reduced  tlie  number  of  white  employees 
and  re-employed  Chinese. — Coolidge,  page  367. 

31 


If  a  Chinaman  liad  a  job  ami  a  wliiti'  man  had  none,  it  was  assnmcd  that 
but  for  this  Chinaman  the  white  wouKl  have  that  job;  and  the  Chinese 
were  looked  upon  as  the  prime  causes  of  any  labor  idleness  that  existed. 
This,  it  can  be  seen,  was  not  true.  The  Chinese  have  disa]>peared  and  tlie 
idle  army  has  increased,  not  lessened. 

W'e  can  see,  therefore,  that  what  is  necessary  for  the  California  manu- 
facturer to  do  to  bring  himself  equal  to  his  Eastern  competitor  is  to 
eliminate  the  union  from  his  establishment  and  \n\t  his  business  on  a 
scientific  basis,  paying  according  to  labor  jierformed  and  adjusting  wages 
to  meet  his  competition,  so  he  can  manufacture  and  compete,  not  only 
here  but  in  whatever  market  it  should  be  fitting  for  him  to  enter.  If  he 
cannot  get  the  labor  at  the  wage  he  offers,  that  is,  if  labor  otherwise  desir- 
ing to  be  employed  is  not  willfully  held  from  him  by  the  unions,  he  then 
knows  that  he  ought  not  conduct  the  I)usiness  in  the  field  he  is  trying  to 
occupy.  Such  would  mean,  simply,  that  labor  can  get  more  wages  in  other 
occupations,  and  that  his  competitor  has  some  advantage  in  bringing  for- 
ward the  product  that  he  does  not  possess.  Natural  advantages  should 
properly  bestow  upon  a  producer  a  benefit  in  the  face  of  competition. 
Factories  should  be  located  at  sites  where  they  can,  under  free  conditions, 
produce  cheapest  and  best. 

In  this  matter  of  eliminating  the  union  as  an  interference  and  readjust- 
ing wages,  the  manufacturer  need  have  no  apprehensions  of  the  union.  He 
has  the  ability  to  bring  to  his  aid  a  force,  the  most  cogent  in  existence, 
whose  power  neither  the  union  nor  any  other  influence  can  successfully 
oppose.  This  is  the  force  of  public  opinion.  The  manufacturers,  coordi- 
nating with  employers  generally  throughout  the  State,  as  could  readily  be 
done  through  the  instrumentality  of  the  several  employers'  organizations 
now  existing,  could  by  simply  declaring  their  purposes  and  presenting  their 
employees  with  their  conditions,  bring  about  a  regime  which  would  at  once 
free  industry.  A  clear  and  distinct  statement  of  the  condition  which  the 
factories  have  to  meet  and  the  necessities  for  their  act  published  in  the 
newspapers  would  move  public  opinion  to  the  side  of  the  employer.  The 
people  of  California  will  not  tolerate  a  condition  wdiich  shuts  this  State  out 
of  the  field  of  manufacturing  and  holds  it  dowai  to  agriculture  and  the 
fabrication  of  quick-perishing  products  merely  because  employees  de- 
mand a  wage  rate  which  the  industries  cannot  pay.  And  they  will 
be  prompt  to  rebuke  in  all  the  ways  that  popular  disapprobation  is  evoked 
those  who  make  such  demands  when  they  have  knowledge  that  forced  high 
wages  mean  simply  high  prices  and  do  not  benefit  the  laborer,  while  they 
contract  the  industry,  keep  thousands  out  of  eniiployment  and  hold  down 
business  in  all  directions  through  lessening  the  product.  The  method  of 
calling  upon  public  opinion  in  labor  disputes,  of  adopting  the  public  who 
must  suft'er  the  effects  of  a  labor  disturbance  as  a  third  party  to  the 
contest,  is  by  no  means  a  suggestion  originating  with  me.  It  is  the  basis 
of  the  laws  of  Canada  of  which  Mr.  W.  L.  Mackenzie  King  is  the  autlior, 

32 


and  their  a])plication  to  practice  has  been  productive  of  most  satisfactory 
results,  both  the  employer  and  employee  so  demeaning  themselves  before 
a  forum  where  conscience,  fairness,  public  interest  and  common  sense  are 
the  criterions,  that  the  grounds  of  disagreement  between  them  disappear 
and  settlements  are  made  before  publication  of  the  conclusions  of  the 
investigators  becomes  necessary. 

It  can,  therefore,  be  seen  that  the  rise  of  our  California  manufacturing, 
of  our  shipping  and  all  that  flows  from  these  industries,  is  really  a  simple 
matter.  It  recjuires  merely  a  unification  of  the  employers  of  the  State,  now 
already  organized  in  their  several  associations  and  federations,  their  resolve 
to  put  into  efifect  elimination  of  the  union  in  so  far  as  the  industries  are 
concerned,  and  to  places  wages  at  rates  that  are  necessary  to  enable  their 
goods  to  enter  the  markets  which  are  properly  tributary  to  this  State ;  and 
in  this  operation  to  make  a  clear,  fair,  terse  statement  to  the  public  of  the 
necessities  which  require  this  act.  The  undertaking  should  be  proceeded 
by  a  period  of  education  of  the  public  along  the  economic  lines  as  regards 
wages  and  as  regards  trade,  such  as  is  now  being  conducted  by  the  Business 
Men's  Economic  Association,  and  to  this  endeavor,  in  support  and  facilita- 
tion all  employers  should  vmite.  for  the  active  interest  and  effort  of  all  is 
necessary.  This  is  the  only  possible  way  that  the  great  problem  which  is 
overcoming  our  manufacturers  can  be  solved,  and  if  it  be  not  solved  the 
forces  now  in  full  play  will  go  on,  not  only  to  the  suppression  of  the  larger 
manufacturers  of  our  State,  but  to  the  wreck  of  all  business  through  the 
turning  of  nearly  all  utilitarian  affairs  into  the  hands  of  government  along 
lines  of  Socialism,  and  the  practical  suppression  of  liberty  as  we  have  been 
wont  to  enjoy  it,  as  I  have  shown  in  the  "Industrial  Unrest."* 

Our  attitude  toward  the  laborers  and  their  unions  in  this  movement 
must  not  be  taken  as  antagonistic.  We  do  not  wish  to  "fight  the  union," 
to  get  out  with  chips  on  our  shoulders  and  combat  them  by  main  force. 
The  employers  will  assert  in  the  field  of  their  operations  that  order  of  knowl- 
edge and  action  thereupon,  which  belongs  to  their  positions  as  proprietors 
and  employers.  The  very  fact  that  they  are  the  heads  of  businesses  im- 
ports a  higher  order  of  knowledge,  of  executive  ability,  than  is  possessed 
by  the  men  whom  they  employ.  It  is  not  expected  of  the  help  that  they 
shall  have  the  administrative  talent,  the  wise  and  experienced  view  of  things 
as  exists  with  the  heads.  Hence,  in  these  great  questions  we  are  considering 
the  laborers  do  not  know,  and  are  not  to  be  expected  to  know,  what  is  for 
their  benefit.  Were  they  so  imbued  with  wisdom  they  would  not  be  laborers, 
but  would  be  severally  occupying  stations  of  a  higher  grade  in  society. 
The  lowering  of  wages,  and  at  the  same  time  lowering  the  prices  of  the 
nianufactvn^ed  commodity  (for  the  two  must  g(j  together)  in  orck-r  that  the 

*Note  on  page  18  of  Tlie  Industrial  Unrest,  the  circumstance  of  the  business  men  of  England 
laising  $250,000,000  to  defend  themselves  against  the  mass  strike  being  shaped  up  to  take  effect  in 
1915,  and  which  undoubtedly  would  Iiave  been  "pulled  oflf"  had  it  not  been  for  the  war.  In  a  small 
and  highly  industrial  country  like  England  the  operation  and  effects  of  Ihe  trades  union  principle  may 
be  observed  with  more  clearness  than  in  a  large  nation  like  the  United  States.  It  is  shown  that  when 
the  unions  attain  a  certain  development  they  coalesce  and  become  highly  syndicalistic,  t.  e.  anarchistic, 
and  so,  in  a  solidified  mass,  enter  upon  battle  with  the  whole  of  society. 

401495 


manufacturer  may  hold  and  extend  his  markets,  iherehy  i^ivint;-  employ- 
ment to  more  men.  would  he  an  operation  not  hannim;',  hut  benefiting  the 
laborer;  and.  as  I  say.  would  be  supjx)rted  by  public  opinion,  for  such 
would  mean  lower  prices,  less  cost  of  living,  and  great  business  activity. 
It  is  hence  a  part  of  the  fund  of  knowledge  with  which  the  employer  must 
necessarily  be  equipped  in  order  to  successfully  operate  his  business,  that 
he  shall  be  advised  upon  the  economic  matters  we  have  discussed  herein. 
Understanding  of  these  matters,  while  in  the  highest  degree  needful  to  be 
applied  to  the  separate  business  of  the  individual  proprietor,  is  at  the  same 
time  commonly  needful  to  all  employers,  and  so  unites  the  entire  body  into 
a  close  knitted  community  of  interest  and  accord.  For  any  emplo3^er,  being 
ignorant  of  these  economic  laws,  to  reject  their  knowledge  when  proflFered, 
as  is  typified  herein  by  the  figure  Jones,  is  not  only  absurd,  but  it  is 
execrable ;  it  at  once  destroys  his  dignity  and  scope  as  an  employer,  and 
degrades  him  to  a  nameless  level — an  indififerent.  irresponsible  Sans-genc, 
far  below  the  status  of  his  employees,  for  they  in  their  unions  are  in  very 
truth  guided  by  a  body  of  economic  principles,  albeit  they  are  false 
economics — that  phase  of  economics  which  presents  the  appearance  and 
not  the  truth,  which  latter  can  be  reached  and  seen  only  through  deduction. 
Accordingly  the  unions  are  pushing  their  positions  conformably  to  their 
lights  and  to  their  concepts  of  their  interests.  They  have  done  this,  have 
evolved  into  this,  solely  because  the  employers  have  neglected  to  do  their 
part,  which  was  to  study  these  questions,  find  out  the  correct  course  to 
pursue  and  set  the  directions  upon  that  course  for  the  guidance  of  all. 
The  employees,  hence,  cannot  be  blamed  for  their  attitude  notwithstanding 
thev  are  wrong.  It  rests  with  the  superior  wisdom  and  abilities  of  the 
employers,  who  are  in  law  and  in  truth  their  masters,  to  show  and  assert 
the  right,  the  way  that  is  for  the  common  benefit  of  both  employer  and 
employee  and  for  all  society ;  and  when  the  employer  proves  derelict  to  this 
position,  willfully  refusing  to  assume  and  perform  this  duty,  and  stupidly 
rejects  the  profifered  information  as  to  these  laws,  not  only  is  he  unworthy 
of  any  consideration  in  the  presence  of  the  destructive  forces  that  are 
moving  upon  him,  but  as  a  social  entity  and  agent  he  is  in  every  respect 
reprehensible. 

Here,  then,  it  may  be  remarked,  my  conclusions  are  in  opposition  to 
any  legislation  of  any  kind  against  the  Easterner  aiming  at  keeping  his 
goods  out  of  the  State,  or  any  line  of  movement  trying  to  develop  a  differ- 
ential taste  for  our  home-made  goods  at  higher  cost  on  the  score  of  senti- 
ment. I  recommend  the  abolition  of  protective  tarififs.  the  repeal  of  immi- 
gration restriction,  and  the  elimination  of  the  union  from  industry,  com- 
pelling it  to  confine  its  activities  to  benevolent  objects  among  its  own 
members,  and  to  creating  amongst  them  by  a  spirit  of  emulation,  superior 
workmen  wdio  will  be  willingly  paid  higher  w'ages  than  others,  but  because 
they  perform  more  and  better  work.  When  the  union  attains  this  status 
in  the  field  of  industry,  its  members  standing  upon  their  own  rights  and 

34 


respecting  the  rights  of  others,  basing  its  title  to  respect  upon  its  merit  and 
not  upon  force,  it  will  then  possess  a  dignity  and  be  paid  a  deference  which 
is  withheld  it  now.  Its  members  will  be  the  true  aristocrats  of  labor,  enjoy- 
ing the  highest  wages,  which  will  then  be  real  high  wages  for  they  will 
buy  in  a  constantly  lowering  market,  instead  of  as  now  in  a  constantly 
rising  one ;  while  their  wages,  being  based  on  economic  law,  will  never 
decline,  but  will  from  thence  on  slowly  rise. 

Could  any  proposals  than  these  I  make  be  more  unpopular  in  San 
Francisco  today?  They  are  in  the  very  teeth  of  all  the  education  that 
San  Francisco  has  ever  had  upon  these  public  questions.  But  manifestly 
our  city  and  State  is  deranged  and  sick,  and  this  Business  Men's  Economic 
Association  was  organized  to  show  what  is  the  matter.  It  cannot  do  so  by 
pandering  to  ignorance,  to  bias  and  to  folly ;  it  must  pursue  the  line  of 
natural  law,  of  economic  truth,  wherever  it  may  lead,  and  trust  to  the 
common  sense  of  the  people  to  give  effect  to  the  way  when  shown.  In 
dealing  with  economic  law,  we  can  no  more  swerve  to  the  right  or  the  left, 
than  can  a  just  judge  in  ruling  upon  municipal  law.  To  do  so  is  false 
and  craven. 

And  it  must  be  noted  that  the  several  measures  opposed  are  all 
restrictive,  whereas  their  opposites  for  which  we  contend  are  in  behalf  of 
liberty.  Free  trade,  free  intercourse  or  migration,  free  industry.  Our  trouble 
is  that  human  freedom  has  been  circumscribed  and  denied.  We  have  been 
loading  ourselves  with  shackles,  tying  our  hands  in  all  directions  upon  the 
assumption  that  to  deny  ourselves  liberty  was  for  our  benefit.  A  century 
ago  men  were  held  in  chains  by  privileged  governing  classes,  who  conceived 
that  they  severally  were  advanced  by  enslaving  the  people.  Our  fathers 
fought  themselves  loose  from  this  bondage  and  founded  this  republic  upon 
principles  of  individual  liberty  and  human  freedom,  shaping  an  organic 
law  which  they  deemed  would  secure  to  their  posterity  the  blessings  of 
those  rights  for  which  they  had  shed  their  blood.  We  here,  possessed  of 
this  heritage,  have  permitted  ourselves  to  become  bound  in  lashes,  not  by 
a  privileged  governing  class,  but  by  our  own  ignorance,  our  stupid  indiffer- 
ence to  the  phenomena  going  on  about  us.  This  can  no  longer  be  permitted 
to  continue  without  disaster,  not  only  to  business  and  property,  but  to 
society  and  to  the  nation.  The  forces  now  at  work  have  only  to  be  let 
alone  to  drive  the  nation  and  its  several  States  into  that  same  order  of 
autocracy  and  despotism  from  which  our  ancestors  emerged  through  revolt 
and  the  expenditure  of  countless  lives.  It  is  altogether  a  (|uestion  as  to 
Vi'hether  we  have  the  intelligence  and  energy  to  see  and  correct  these 
wrongs  and  put  California  on  a  safe  basis.  If  we  have  not  there  is  a 
provision  in  nature  which  will  attend  to  things  for  us  later  on,  in  that 
summary  and  stern  way  with  which  slic  always  deals  with  derelictions  and 
their  doers,  and  which  may  be  undcrstDod  through  my  forthcoming  pamphlet 
"IVar  and  Business." 


35 


WRITINGS  OF  JOHN  E.  BENNETT 

BOOKLETS 

The  following  are  short  articles  published  in  a  form  to  be  easily  carried  by  the 
ordinary  business  envelope,  together  with  a  letter,  under  a  two-cent  stamp. 

What  Will  Become  of  Business? 

Being  an  abridgment  of  the  pamphlet,  THE  INDUSTRIAL  UNREST,  and 
designed  for  use  as  either  an  introduction  to  the  reading  of  that  paper,  or  ad 
a  synopsis  of  it  for  the  requirements  of  the  busy  man. 

The  End  of  Business 

A  short  essay  upon  the  passing  of  the  employer's  right  to  discharge  an  employee, 
hence  to  maintain  control  over  his  business;  the  incident  vesting  in  the  em- 
ployee of  a  property  right  in  the  employer's  establishment  by  virtue  of  the 
induction  of  the  employee  therein,  and  the  attitude  of  the  government  of  the 
United  States  through  its  Department  of  Labor  in  reference  to  this  demand. 
The  effect  such  principle  must  have  upon  business  and  statement  of  the  needful 
changes  in  the  industrial  and  political  world  to  restore  freedom  and  bring 
prosperity  to  industry. 

An  Erroneous  View -point 

Showing  errors  of  the  popular  ideas  of  remedies  for  the  industrial  unrest,  in  which 
erroneous  views  many  heads  of  large  businesses  are,  through  ignorjmce  of  the 
principles  of  correct  solution,  now  concurring.  A  discussion  of  the  relation  of 
idle  industrial  armies  of  America  to  the  active  military  armies  of  Europe,  and 
of  the  prevailing  indisposition  to  regard  industrialism  as  a  structure  workable 
on  lines  of  natural  law. 

The  Next  Pamphlet 

The  forthcoming  pamphlet  is  entitled  War  and  Business.  It  will  be  a  discus- 
sion presenting  a  solution  of  the  vexed  question  of  further  armament  on  part  of 
the  United  States,  which  now  threatens  not  only  to  convert  many  thousands  of 
our  youth  into  soldiers,  burden  business  with  increased  taxes  to  support  the  waste 
of  munitions,  but  is  preparing  the  soil  for  the  blood  of  our  children  if  not  of  many 
of  ourselves  and  of  those  who  are  now  our  friends,  clients  and  customers,  whose 
duty  it  will  then  be,  through  no  fault  of  theirs  or  ours,  to  shoot  us,  and  we  them. 
Incidentally  this  paper  will  present  what  is  confidently  asserted  as  the  rational 
policy  and  determination  of  the  whole  world's  peace  question,  which  has  occa- 
sioned so  much  controversy,  without  the  result  of  stopping  war,  throughout  the 
world. 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 
This  book  is  DUE  on  the  last  date  stamped  below 


^!AY5    /94» 


I/IAY  2  5  1951 1 


OCT  07 1991 


DEC  2  8 1979 

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Excerpt  from  the  By-Laws  of  the 
BUSINESS  MEN'S  ECONOMIC  ASSOCIATION 

Membership  of  this  Association  shall  be  three  kinds,  viz.: 

Full  membership,  the  fee  for  which  is  $10.00  per  annum,  and  shall  entitle  th 
holder  to  free  receipt  of  all  literature  and  free  admission  for  himself  and  famil- 
to  all  lectures,  issued  or  delivered  by  the  Association. 

Club  membership,  the  fee  for  which  is  $2.00  per  year  and  entitles  the  holde: 
to  free  receipt  of  all  literature  issued  by  the  Association  and  to  admission  to  al 
lectures  upon  payment  of  one-half  the  regular  price.  Club  members  are  admittec 
only  in  those  cases  where  at  least  one  full  membership  is  held  in  the  Associatior 
by  the  corporation,  firm  or  house  in  which  the  proposed  Club  member  is  employed 

Professional  membership,  the  fee  for  which  is  $5.00  per  year,  is  limited  to 
members  of  the  professions,  and  entitles  the  holder  to  free  receipt  of  all  Associa- 
tion literature  and  free  attendance  upon  all  lectures. 

UNIVERSITY  OF  CALIFORNIA 
AT 


3  1158  00423  2939 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


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